The European Union has set a global precedent with the entry into force of the EU AI Act, the world’s first comprehensive legal framework for artificial intelligence. With its extraterritorial scope, the regulation applies far beyond Europe, creating a new landscape of compliance for U.S. businesses that develop, use, or distribute AI solutions targeting the European market.
What Is the EU AI Act?
The Act defines an “AI system” as any autonomous device producing predictions, recommendations, or decisions using algorithms and data; this spans applications from recruitment tools and finance to autonomous driving. If your product or service incorporates such technology and is accessible or used by entities within the EU, it falls under the scope—even if managed from the United States.
Risk Levels and Compliance Obligations
The Act establishes a tiered, risk-based framework that calibrates regulatory requirements for AI systems according to the level of potential harm they pose:
– Unacceptable Risk: Strictly prohibited (e.g., mass surveillance systems, social scoring).
– High Risk: Subject to stringent requirements (medical devices, credit scoring tools, recruitment systems).
– Specific Transparency Risk: Limited but mandatory disclosure requirements.
– Minimal Risk: Basic obligations only.
Your responsibilities will differ based on your role in the value chain—provider, deployer (user), importer, or distributor—and may involve technical documentation, risk assessments, incident monitoring, and cybersecurity protection.
Why Care About Compliance?
Beyond fines reaching up to €35 million or 7% of global annual revenue, compliance preserves reputation and market access. However, embracing the AI Act can also deliver strategic benefits: stronger digital governance and risk management, greater transparency, and enhanced trust with clients and partners worldwide.
Three Tips for U.S. Companies
1. Assess Exposure: Map all uses of AI in your products or services connected to the EU market—direct or indirect.
2. Strengthen Documentation and Transparency: Prepare technical documentation in advance, anticipate audit requests, and formalize your data governance frameworks.
3. Adopt Proactive Governance: Vet vendors for hidden risks, optimize data security infrastructure, and align your AI strategy with long-term business objectives to transform compliance into a competitive advantage.
Goossaert Law is a Paris-based independent law firm that specializes in data compliance and AI risk. We assist European and U.S. businesses and investors in securing deals, building brand value, and remaining compliant through actionable recommendations.
To explore the EU AI Act in greater depth and access practical guidance, download the full presentation at Goossaert Law: www.goossaertlaw.com.
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