AI Compliance: Navigating the EU AI Act

As artificial intelligence (AI) evolves, its benefits are clear in many areas. AI streamlines processes, improves decision-making, and opens new business opportunities.

However, with these benefits come risks. People have misused AI to impersonate individuals, use biased algorithms in hiring, or make incorrect fraud detections. These issues highlight the potential dangers AI poses to health, safety, and fundamental human rights.

To address these concerns and provide businesses with legal certainty, the European Union introduced the EU AI Act. This regulation aims to reduce the risks of AI systems and make sure they’re developed and used responsibly.

In this article, we will explain the main parts of the EU AI Act and show how organizations can get ready to comply. 

The EU AI Act is a regulation. Its goal is to oversee the development and use of AI systems in the European Union. It aims to reduce the risks that AI poses to public safety and human rights. It also provides legal certainty for businesses.

The AI Act takes a risk-based approach. It classifies AI systems into categories based on the level of risk they present.

• Minimal or Low Risk: Systems that require minimal oversight, such as chatbots or video game AI. These systems must follow transparency and basic safety rules, but they do not have strict regulations.
• High Risk: Systems that greatly affect safety or basic rights. This includes systems used in healthcare, transportation, or public safety. High-risk AI systems are subject to strict regulations to ensure they operate safely and ethically.
• Prohibited Risk: The EU bans these systems entirely. Examples include AI that changes behavior, rates people based on their traits, or uses biometric identification in public areas.

The higher the risk level of an AI system, the stricter the requirements imposed by the EU AI Act.

AI governance includes the rules, practices, and standards that guide how we develop, use, and monitor AI systems. Effective AI governance goes beyond compliance—it builds a culture of responsibility and ethical AI use within an organization.

The EU AI Act sets out clear rules to regulate AI systems based on their potential risks. For organizations deploying AI systems in the EU, AI compliance is crucial. Not following the rules can result in fines or damage to your brand.

Building robust AI governance structures is essential to comply with the regulations of the EU AI Act. Organizations should consider the following steps:

• Leadership Commitment: Successful compliance starts with strong leadership. Senior executives must show their commitment by dedicating resources and supporting AI governance efforts. This includes making compliance a strategic priority and ensuring all teams understand the importance of adhering to AI regulations.
   
• Set Up an AI Governance Body: Establishing a dedicated governance team is crucial. This group should manage AI projects, create compliance plans, and make sure that AI systems follow ethical standards and rules. The governance body will also be responsible for training and upskilling team members involved in AI development and deployment.
   
• Conduct a Gap Analysis: Start by assessing your current Quality Management Systems (QMS) and policies. Compare them against the EU AI Act’s requirements to identify any gaps. Once you have identified gaps, create a detailed roadmap with clear steps, timelines, and responsibilities to address them. This structured approach ensures smooth transitions toward compliance.
   
• Standardize Risk Management: Establish standardized methods for classifying AI systems by their risk level. This helps to quickly assess each AI use case. It also determines its risk level and applies the right obligations and strategies to reduce risks.
   
• Document Compliance: Ensure that your team prepares technical documentation for every AI system before placing it on the market. Automating parts of this process, when possible, can reduce the administrative burden. This documentation is critical for demonstrating compliance with the EU AI Act's requirements.
   
• Ongoing Monitoring and Improvement: Compliance doesn’t stop once an AI system is deployed. Organizations must regularly monitor their AI systems and the performance of their QMS. Regularly identifying and addressing issues ensures ongoing compliance and helps mitigate new or emerging risks.

Certain AI systems, classified as high-risk under the EU AI Act, require extra caution. These include AI used in critical sectors such as healthcare, public safety, and generative AI applications. These systems can significantly impact human lives and fundamental rights, making rigorous oversight necessary.

To comply with the regulations, organizations using high-risk AI systems should take the following steps:

• Set Up a Risk Management System: A strong risk management system should be in place. It must identify, evaluate, and reduce risks related to health, safety, and human rights. This system should regularly assess potential threats and ensure AI systems maintain high standards of safety throughout their lifecycle.
   
• Human Oversight Mechanisms: High-risk AI systems must include human oversight. This ensures that humans can review and correct decisions made by AI if needed. Human operators should have the ability to intervene and stop or alter the AI system's output when required.
   
• Data Management: High-risk AI systems require robust data management practices. These practices ensure that data is accurately labeled, secure, and governed throughout the system's lifecycle. High-quality data reduces the likelihood of errors, bias, or security breaches in AI systems.
   
• Detailed Documentation: Organizations must maintain thorough records that detail how they develop, test, and use their AI systems. Transparency is key—users must understand how to operate AI systems and interpret their outputs responsibly.
   
• Ongoing Testing and Improvement: Regularly testing high-risk AI systems ensures accuracy, robustness, and cybersecurity. This process should be ongoing throughout the system's lifecycle to account for new risks and weaknesses.

The European Commission and European Parliament play crucial roles in shaping AI regulations in the EU. To stay compliant, organizations need to stay updated on legislative changes and amendments to the AI Act.

Here’s how businesses can stay informed:

• Monitoring Legislative Updates: AI regulations are constantly evolving. Organizations must regularly check for updates to the EU AI Act and any new amendments. Staying informed ensures that your business remains compliant with the latest requirements.
   
• Engaging with Regulatory Bodies: Organizations can participate in public consultations and provide feedback on proposed regulations. Working with regulatory bodies helps businesses understand AI compliance expectations. It also allows them to influence future AI policies.