{"id":33552,"date":"2025-07-03T14:56:11","date_gmt":"2025-07-03T14:56:11","guid":{"rendered":"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/technology\/a-lawyers-guide-to-the-eu-ai-act\/"},"modified":"2025-12-17T16:41:44","modified_gmt":"2025-12-17T21:41:44","slug":"a-lawyers-guide-to-the-eu-ai-act","status":"publish","type":[106],"link":"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/technology\/a-lawyers-guide-to-the-eu-ai-act\/","title":{"rendered":"A Lawyer\u2019s Guide to the EU AI Act"},"content":{"rendered":"<div  class=\"bbg-row-container\">\n    <style>section[data-anchor='row-6a57dbf73a491'] {\n\t\t\t\tbackground-image: url(https:\/\/assets.bbhub.io\/image\/v1\/resize?width=auto&type=webp&url=https:\/\/assets.bbhub.io\/bna\/sites\/18\/2024\/01\/article-header-2.jpg);\n\t\t\t  }<\/style>\n    <section class=\"bbg-row bg--has-media       bg--eeeeee text--white bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf73a491'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8 bbg-column--valign-bottom\"\n    style=\"\"\n    >\n    <p>    <ul class=\"bbg-categories_list\">\n                    <li>\n                <a href=\"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/artificial-intelligence\/\" rel=\"category tag\">\n                    Artificial Intelligence\n                <\/a>\n            <\/li>\n                    <li>\n                <a href=\"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/technology\/\" rel=\"category tag\">\n                    Technology\n                <\/a>\n            <\/li>\n            <\/ul>\n<div\n    class=\"bbg-spacer\"\n        style=\"height: 24px !important\"\n    >\n<\/div>    <h1 class=\"bbg-metadata bbg-metadata--title\">A Lawyer\u2019s Guide to the EU AI Act<\/h1>\n<\/p>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf743aad'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <p>[vc_row_inner][vc_column_inner width=&#8221;8\/12&#8243;]<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Navigate compliance and reduce risk around artificial intelligence<\/h2>\n\n<\/div>\n[\/vc_column_inner][\/vc_row_inner][vc_row_inner][vc_column_inner width=&#8221;2\/3&#8243;]<div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p>The EU AI Act ushers in a new era of global accountability for AI use. As strategic advisors, lawyers must engage early and often with cross-functional partners such as compliance, data science, and product teams. With the right tools and information, counsel can manage compliance and reduce risk. Bloomberg Law offers comprehensive news, analysis, guidance, and tool kits to help legal teams position their organizations for success.<\/p>\n\n<\/div>\n<div\n    class=\"bbg-spacer bbg-spacer--md\"\n    >\n<\/div>\n<div\n  id=\"cta_1198683564648540107\"\n  class=\"wpb_content_element bbg-cta no-icon\">\n  <style>\n    #cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-button {\n    background: #000000 !important;    border-width: 1px !important;\n    border-color: #000000 !important;\n    border-style: solid;\n  }\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-button:hover {\n    background: #ffffff !important;\n    border-color: #000000 !important;\n  }\n    #cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-link {\n\tcolor: #ffffff !important;\n}\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-button__icon-right::after {\n\tcolor: #ffffff !important;\n}\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-button__icon-left::before {\n\tcolor: #ffffff !important;\n}\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-link:after {\n\tbackground-color: #ffffff !important;\n}\n    #cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-link:hover {\n\tcolor: #000000 !important;\n}\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-link:hover:after {\n\tbackground-color: #000000 !important;\n\tcolor: #000000 !important;\n}\n\n#cta_1198683564648540107.bbg-cta .bbg-cta-link.link-holder .bbg-cta-link:hover:before {\n\tcolor: #000000 !important;\n}\n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p left\">\n      <a\n        class=\"bbg-cta-link link bbg-cta-button\"\n        href=\"https:\/\/pro.bloomberglaw.com\/request-a-demo\/?trackingcode-cta=BLAW25115459\"\n        target=\"\"\n        rel=\"\"\n        data-section-name=\"Request a Demo\"\n        >\n                      Request a Demo\n                <\/a>\n    <\/p>\n  <\/div>\n<\/div>\n<div\n    class=\"bbg-spacer bbg-spacer--md\"\n    >\n<\/div>[\/vc_column_inner][vc_column_inner width=&#8221;1\/12&#8243;][\/vc_column_inner][\/vc_row_inner]<\/p>\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row bg--black  text--black row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf747150'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2 style=\"text-align: left;\">Resources for attorneys to lead on EU AI Act compliance<\/h2>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row bg--black  text--black row-padding--top-none bbg-row--v-stretch bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf748eee'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-4\"\n    style=\"\"\n    >\n    <div class=\"wpb_content_element bbg-card  bbg-card-custom bbg-card_hasCta bbg-card_hasLinkWrap bbg-card-text-white\" id=\"card_1\" data-card_type=\"no_image\">\n      <style>#card_1 .bbg-card__innerwrapper {background-color: #000000;}#card_1 .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_1:hover .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_1 .bbg-card__innerwrapper {\n\tpadding: calc(var(--brand-large-padding, 40px) - 1px) !important;\n\t}#card_1 .bbg-card__innerwrapper .bbg-card__title {\n\tcolor: #ffffff !important;\n\t}#card_1 .bbg-card__innerwrapper .bbg-card__content,#card_1 .bbg-card__innerwrapper .bbg-card__content p  {\n\tcolor: #ffffff !important;\n\t}#card_1.bbg-card_hasImage .bbg-card__innerwrapper{padding-top: calc(var(--brand-default-padding, 16px) - 1px);padding-left: calc(var(--brand-default-padding, 16px) - 1px);padding-right: calc(var(--brand-default-padding, 16px) - 1px);}<\/style>\n  \n      <a href=\"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/technology\/understand-the-eu-ai-act-with-confidence\/?trackingcode-cta=BLAW25115460\" target=\"\" rel=\"\" class=\"bbg-card-link_wrap\">\n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n              <div class=\"bbg-card__eyebrow\" style=\"color: #ffffff\">REPORT<\/div>\n      \n                      <h3 class=\"bbg-card__title\">Understand the EU AI Act With Confidence<\/h3>\n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><\/p>\n<p class=\"small\">Download this special report for insights from legal experts on the EU AI Act\u2019s risk framework, timelines, and penalties.<\/p>\n<p>\n<\/div>\n          <\/div>\n\n          \n<div\n  id=\"cta_418430338707793169\"\n  class=\"wpb_content_element bbg-cta no-icon\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p left\">\n      <span         class=\"bbg-cta-link link bbg-cta-arrow\"\n        \n        >\n                <\/span>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n      <\/a>\n  <\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-4\"\n    style=\"\"\n    >\n    <div class=\"wpb_content_element bbg-card  bbg-card-custom bbg-card_hasCta bbg-card_hasLinkWrap bbg-card-text-white\" id=\"card_2\" data-card_type=\"no_image\">\n      <style>#card_2 .bbg-card__innerwrapper {background-color: #000000;}#card_2 .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_2:hover .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_2 .bbg-card__innerwrapper {\n\tpadding: calc(var(--brand-large-padding, 40px) - 1px) !important;\n\t}#card_2 .bbg-card__innerwrapper .bbg-card__title {\n\tcolor: #ffffff !important;\n\t}#card_2 .bbg-card__innerwrapper .bbg-card__content,#card_2 .bbg-card__innerwrapper .bbg-card__content p  {\n\tcolor: #ffffff !important;\n\t}#card_2.bbg-card_hasImage .bbg-card__innerwrapper{padding-top: calc(var(--brand-default-padding, 16px) - 1px);padding-left: calc(var(--brand-default-padding, 16px) - 1px);padding-right: calc(var(--brand-default-padding, 16px) - 1px);}<\/style>\n  \n      <a href=\"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/privacy\/the-eu-ai-act-legal-impacts-on-u-s-companies\/?trackingcode-cta=BLAW25115461\" target=\"\" rel=\"\" class=\"bbg-card-link_wrap\">\n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n              <div class=\"bbg-card__eyebrow\" style=\"color: #ffffff\">ON DEMAND<\/div>\n      \n                      <h3 class=\"bbg-card__title\">The EU AI Act: Legal Impacts on U.S. Companies<\/h3>\n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><\/p>\n<p class=\"small\">Watch for practical, real-world guidance on how U.S. businesses are responding to the EU AI Act and the challenges they\u2019re facing.<\/p>\n<p>\n<\/div>\n          <\/div>\n\n          \n<div\n  id=\"cta_3420590198551140663\"\n  class=\"wpb_content_element bbg-cta no-icon\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p left\">\n      <span         class=\"bbg-cta-link link bbg-cta-arrow\"\n        \n        >\n                <\/span>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n      <\/a>\n  <\/div>\n\n\n<\/div><div\n    class=\"bbg-column bbg-column--width-4\"\n    style=\"\"\n    >\n    <div class=\"wpb_content_element bbg-card  bbg-card-custom bbg-card_hasCta bbg-card_hasLinkWrap bbg-card-text-white\" id=\"card_3\" data-card_type=\"no_image\">\n      <style>#card_3 .bbg-card__innerwrapper {background-color: #000000;}#card_3 .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_3:hover .bbg-card__innerwrapper {\n\tborder: 1px solid #ffffff !important;\n\t}#card_3 .bbg-card__innerwrapper {\n\tpadding: calc(var(--brand-large-padding, 40px) - 1px) !important;\n\t}#card_3 .bbg-card__innerwrapper .bbg-card__title {\n\tcolor: #ffffff !important;\n\t}#card_3 .bbg-card__innerwrapper .bbg-card__content,#card_3 .bbg-card__innerwrapper .bbg-card__content p  {\n\tcolor: #ffffff !important;\n\t}#card_3.bbg-card_hasImage .bbg-card__innerwrapper{padding-top: calc(var(--brand-default-padding, 16px) - 1px);padding-left: calc(var(--brand-default-padding, 16px) - 1px);padding-right: calc(var(--brand-default-padding, 16px) - 1px);}<\/style>\n  \n      <a href=\"https:\/\/bna.content.cirrus.bloomberg.com\/blaw2023\/insights\/technology\/a-buyers-guide-to-legal-ai-tools\/?trackingcode-cta=BLAW25115462\" target=\"\" rel=\"\" class=\"bbg-card-link_wrap\">\n  \n  <div class=\"bbg-card__innerwrapper\">\n    <div class=\"bbg-card__content\">\n      \n              <div class=\"bbg-card__eyebrow\" style=\"color: #ffffff\">GUIDE<\/div>\n      \n                      <h3 class=\"bbg-card__title\">A Buyer\u2019s Guide to Legal AI Tools<\/h3>\n      \n              <div class=\"bbg-card__wysiwyg bb-wysiwyg\"><\/p>\n<p class=\"small\">Get expert insights to help legal professionals choose the right AI solutions to enhance their practice.<\/p>\n<p>\n<\/div>\n          <\/div>\n\n          \n<div\n  id=\"cta_4540772659349970552\"\n  class=\"wpb_content_element bbg-cta no-icon\">\n  <style>\n    \n    \n    \n  <\/style>\n  <div\n    class=\"bbg-cta-link link-holder\"\n    data-links-type=\"cta-links\">\n    <p class=\"bbg-cta-p left\">\n      <span         class=\"bbg-cta-link link bbg-cta-arrow\"\n        \n        >\n                <\/span>\n    <\/p>\n  <\/div>\n<\/div>\n\n      <\/div>\n\n      <\/a>\n  <\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none bbg-jl-start bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf74d197'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <p><div\n    class=\"bbg-column bbg-column--width-9\"\n    style=\"\"\n    >\n    \n<\/div><div\n    class=\"bbg-column bbg-column--width-3\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bbg_jumplinks-container vertical\"\n\tdata-link-color=\"#00d2b3\"\n\tdata-style=\"light\"\n\tdata-direction=\"vertical\"\n\tdata-mobile-behavior=\"dropdown\"\n>\n\t<style>\n\t\t.bbg_jumplinks-container .bbg_jumplinks-scroll:after {\n\t\t\tbackground: #00d2b3;\n\t\t}\n\t<\/style>\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--bottom-none bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf74f880'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<p>The world\u2019s first legally binding AI framework is here \u2013 and its mandates are far-reaching.<\/p>\n<p>Passed by the European Parliament in March 2024 after three years of negotiations, the Artificial Intelligence Act (EU AI Act) establishes the first comprehensive regulatory regime for artificial intelligence. Although enforcement across the EU rolls out in phases, some provisions take effect earlier and already carry penalties. Most core compliance obligations will be mandatory by August 2, 2026.<\/p>\n<p>The EU AI Act is far more expansive than prior digital regulations. And it spans the entire AI value chain \u2013 from providers to authorized representatives \u2013 with relevance to companies even outside the EU.<\/p>\n<p>To deliver an effective response, legal teams must ensure AI compliance is built into operations from the start, much like the \u201cprivacy by design\u201d principles of the GDPR. It\u2019s a tall order, but also a defining opportunity for legal teams.<\/p>\n<p>With the right preparation and tools, counsel can help organizations reduce risk \u2013 and gain a competitive edge. Bloomberg Law\u2019s <a href=\"https:\/\/pro.bloomberglaw.com\/products\/legal-research-and-software\/practical-guidance\/\">comprehensive collection of practical guidance<\/a> on the EU AI Act is designed to help lawyers navigate the complexities of the law and its impact on their organizations \u2013 from obligations and risk assessment to compliance and M&amp;A considerations.<\/p>\n<p><a href=\"https:\/\/pro.bloomberglaw.com\/products\/legal-research-and-software\/\">Bloomberg Law<\/a> further helps legal teams save time, reduce costs, and stay ahead. Our AI-powered research tools, trusted news, and expert guidance give you everything you need to respond faster and work more efficiently.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-jl-start bbg-row--full-bg-bleed\" data-jump-link-label='What is the EU AI Act and who does it apply to?' data-anchor='row-6a57dbf75179e' id='what-is-the-eu-ai-act'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>What is the EU AI Act and who does it apply to?<\/h2>\n<p>The <a href=\"https:\/\/artificialintelligenceact.eu\/\" target=\"_blank\" rel=\"noopener\">EU AI Act<\/a> defines an AI system as software that uses techniques like machine learning to process data and generate outputs \u2013 such as predictions, content, or decisions \u2013 that can influence people, services, or environments.<\/p>\n<p>In terms of applicability, the law has extraterritorial reach: It applies not only to companies in the EU, but also to those companies whose AI systems are used in the EU or those whose outputs are directed at EU users.<\/p>\n<p>Advancing a shared responsibility model (as outlined in the regulation\u2019s Article 25), the act assigns obligations across the AI value chain, which comprises the following entities:<\/p>\n<ul>\n<li><strong>Providers<\/strong>, based in or outside the EU, who develop AI systems or general-purpose AI models for the EU market<\/li>\n<li><strong>Deployers<\/strong>, who use AI systems in the EU, whether they are EU-based or not, if the outputs affect users in the EU<\/li>\n<li><strong>Distributors<\/strong>, who make AI systems available in the EU without being the original provider or importer<\/li>\n<li><strong>Importers<\/strong>, who place AI systems on the EU market under their own name or on behalf of a non-EU company<\/li>\n<li><strong>Product manufacturers<\/strong>, who integrate AI systems into products \u2013 such as medical devices \u2013 placed on the EU market<\/li>\n<li><strong>Authorized representatives<\/strong>, who must be appointed by non-EU providers to serve as their official contact in the EU and ensure compliance with the AI Act<\/li>\n<\/ul>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-row--full-bg-bleed\" data-jump-link-label='When does the EU AI Act go into effect?' data-anchor='row-6a57dbf753917' id='when-does-the-eu-ai-act-go-into-effect'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>When does the EU AI Act go into effect?<\/h2>\n<p>The EU AI Act took effect in August 2024, with enforcement rolled out in phases.<\/p>\n<p>By February 2025, bans on prohibited AI practices \u2013 such as social scoring and manipulative biometric systems \u2013 entered into force, along with a requirement for providers and deployers to begin ensuring a \u201csufficient level\u201d of AI literacy among staff and relevant personnel.<\/p>\n<p>In May 2025, the European Commission published a voluntary code of practice for providers of general-purpose AI (models designed for broad, cross-sector use). The code also addresses general-purpose AI models with systemic risks, referring to those that could cause widespread harm if misused.<\/p>\n<p>Here are some key milestones attorneys should track:<\/p>\n<ul>\n<li><strong>August 2, 2025:<\/strong> Rules for general-use AI models take effect for any models not already on the market, and EU member states must designate enforcement authorities and communicate penalty frameworks by this date.<\/li>\n<li><strong>August 2, 2026:<\/strong> Most core obligations take effect, including for high-risk AI in areas such as hiring, health care, and education \u2013 categories defined under Article 6. Regulators are still expected to clarify this provision, which sets the criteria for classifying AI systems as high-risk.<\/li>\n<li><strong>August 2, 2027:<\/strong> The grace period for current AI systems ends. By then, providers of general-purpose AI models already on the market before August 2, 2025, must comply. The law also covers high-risk AI systems embedded in products, such as toys and radio equipment, where those products are subject to third-party conformity assessments under existing EU legislation.<\/li>\n<li><strong>December 31, 2030:<\/strong> AI used in large-scale IT systems placed on the market before August 2, 2027, must also comply with the AI Act.<\/li>\n<\/ul>\n<p>Beyond these core timelines, further implementation measures are underway: Between 2025 and 2027, the European Commission will issue secondary legislation to clarify compliance.<\/p>\n<p>During this period, the EU will release further harmonized standards \u2013 developed by European standards organizations (CEN, CENELEC, and ETSI, specifically) \u2013 \u00a0to translate broad regulatory requirements into concrete technical specifications in areas such as data governance, transparency, and human oversight. Adhering to these standards gives companies a \u201cpresumption of conformity\u201d with the EU AI Act.<\/p>\n<p>Finally, while the EU AI Act applies across all industries and is not sector-specific, it imposes stricter rules based on the level of risk associated with how AI is used.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-row--full-bg-bleed\" data-jump-link-label='How are AI systems classified under the act?' data-anchor='row-6a57dbf75592f' id='how-are-ai-systems-classified-under-the-act'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>How are AI systems classified under the act?<\/h2>\n<p>The EU AI Act classifies AI systems into four risk categories, based on intended purpose and potential impact: unacceptable risk, high risk, limited risk, and minimal risk. These categories drive legal obligations for entities across the AI value chain.<\/p>\n<h3>1. Unacceptable risk<\/h3>\n<p>AI systems deemed unacceptable risk are completely banned under the EU AI Act. These include systems that manipulate people\u2019s behavior, take advantage of vulnerable groups, or use biometric data to guess sensitive traits like race. Also banned are real-time facial recognition systems used in public spaces by law enforcement; systems that rank people based on behavior or personality (known as social scoring); and AI that tries to detect emotions in schools or workplaces.<\/p>\n<h3>2. High risk<\/h3>\n<p>High-risk AI systems are not banned, but they are the most heavily regulated under the EU AI Act. They\u2019re considered high risk because they can significantly impact people\u2019s safety, rights, or access to services. Examples include AI used for biometric identification, emotion recognition, and categorization; safety systems in critical infrastructure; and education-related AI that may affect someone\u2019s academic or career path. Other cases include AI for hiring, managing workers, credit scoring, insurance pricing, and tools used in legal processes, such as drafting court rulings.<\/p>\n<p>High-risk classification under the AI Act is governed by Article 6. This determination is based on an AI system\u2019s intended purpose and its potential impact on individuals, with Annex III listing specific high-risk use cases. Further guidance from the European Commission is expected by early 2026 to support consistent implementation.<\/p>\n<h3>3. Limited risk<\/h3>\n<p>Limited-risk AI systems interact directly with people \u2013 for example, chatbots or tools that create synthetic content like deepfakes.<\/p>\n<h3>4. Minimal risk<\/h3>\n<p>Minimal-risk AI systems cover applications \u2013 such as AI in video games or spam filters \u2013 that do not fall into the other risk categories.<\/p>\n<h3>How are general-purpose AI models classified?<\/h3>\n<p>General-purpose AI models (GPAIs), such as large language models, fall outside the act\u2019s four-tier risk structure. When the act was first proposed in 2021, GPAIs were not addressed, as the technology was still emerging. With the rise of tools like ChatGPT, lawmakers later introduced a separate framework to account for their role. Because GPAIs can be built into many types of AI systems, they can fall under any of the four risk categories \u2013 depending on how they\u2019re used. They also carry their own distinct set of obligations, particularly if deemed to pose systemic risk.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-row--full-bg-bleed\" data-jump-link-label='What are the compliance obligations for each risk category?' data-anchor='row-6a57dbf7578b5' id='what-are-the-compliance-obligations-for-each-risk-category'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>What are the compliance obligations for each risk category?<\/h2>\n<p>The core principle of the EU AI Act is straightforward: The higher the risk, the stricter the rules. Accordingly, compliance obligations increase with the potential impact of an AI system.<\/p>\n<p>Here\u2019s what\u2019s required at each risk level:<\/p>\n<p><strong>Unacceptable-risk:<\/strong> These AI systems are strictly prohibited in the EU. These bans became enforceable on February 2, 2025, roughly six months after the regulation took effect.<\/p>\n<p><strong>High-risk:<\/strong> These AI systems must implement a quality management system aligned with Article 17, register in the EU\u2019s public database, and, if based outside the EU, appoint an EU representative. These systems also require conformity assessments before entering the EU market and ongoing monitoring after deployment. In all, providers must manage risks, use high-quality training data, and maintain detailed records along with transparency measures to inform users.<\/p>\n<p><strong>Limited-risk:<\/strong> These AI systems have basic transparency rules. Users must be informed \u2013 through labels, notices, or other clear messages \u2013 when they\u2019re interacting with an AI system, such as a chatbot or when content like a deepfake has been created or manipulated by AI.<\/p>\n<p><strong>Minimal-risk:<\/strong> These AI systems, like spam filters or AI in video games, aren\u2019t subject to strict rules under the EU AI Act. However, providers are encouraged to follow voluntary codes of conduct or best practices suggested by industry groups or the European Commission.<\/p>\n<p><strong>General-purpose AI:<\/strong> GPAIs face distinct obligations under the act. Models trained with less than 10 septillion floating point operations (10\u00b2\u2075 FLOPs) must provide documentation and summaries of their training data. Those exceeding that threshold are presumed to pose systemic risk and must implement risk management steps like model evaluations.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-jl-end bbg-row--full-bg-bleed\" data-jump-link-label='What are the operational and legal risks of noncompliance?' data-anchor='row-6a57dbf759826' id='what-are-the-operational-and-legal-risks-of-noncompliance'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>What are the operational and legal risks of noncompliance?<\/h2>\n<p>The EU AI Act, which sets penalties significantly higher than prior European digital laws, imposes a tiered system of fines that escalate with the severity of the violation.<\/p>\n<p>The most serious breaches \u2013 such as using banned AI practices like social scoring \u2013 can result in fines of up to 35 million euros or 7% of global annual turnover, whichever is higher.<\/p>\n<p>Governance failures involving high-risk AI systems \u2013 such as skipping conformity assessments \u2013 can trigger fines of up to 15 million euros or 3% of global annual turnover.<\/p>\n<p>GPAI model providers that fail to meet obligations \u2013 such as withholding technical documentation \u2013 face penalties of up to 10 million euros or 2% of global annual turnover.<\/p>\n<p>Lower-level violations, such as incomplete or misleading reporting, may incur fines up to 7.5 euros or 1% of global annual turnover.<\/p>\n<p>Echoing the idea that AI governance is a shared responsibility across both private and public sectors, EU institutions and agencies are also subject to enforcement \u2013 with fines of up to 1.5 million euros for using prohibited AI systems and up to 750,000 euros for other violations.<\/p>\n<p>The task of determining penalties will fall to national supervisory authorities. Accordingly, enforcement follows a decentralized model: Each EU member state will appoint an authority to oversee local compliance, while the European AI Office will support consistency across the EU.<\/p>\n<p>In addition to regulatory fines, organizations may face legal claims under product liability rules, employment laws, or fundamental rights protections if AI systems cause harm or discrimination. These risks apply across the AI value chain: providers, deployers, importers, and distributors.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-row--full-bg-bleed\" data-jump-link-label='What should attorneys advise for compliance readiness?' data-anchor='row-6a57dbf75b6cd' id='what-should-attorneys-advise-for-compliance-readiness'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>What should attorneys advise for compliance readiness?<\/h2>\n<p>The AI Act introduces distinct obligations that go beyond existing digital regulations. As a result, organizations must treat AI compliance as a standalone effort, with its own processes.<\/p>\n<p>Attorneys should first advise clients to conduct an AI system inventory and classification exercise: Identify all AI systems across the organization \u2013 from internal to third-party applications \u2013 and classify each under the act\u2019s four-tier risk framework. Organizations that leverage GPAI must also assess whether those models fall under GPAI-specific obligations. Furthermore, clients must identify their role in the AI value chain and their EU nexus.<\/p>\n<p>With this foundational insight, legal teams should next review AI governance frameworks, including human oversight protocols. Within vendor management and procurement contracts, organizations should ensure agreements require compliance with the EU AI Act. They must also align data governance and data protection impact assessments (DPIAs) with the GDPR, as many high-risk AI systems process personal data and trigger overlapping obligations.<\/p>\n<p>Next, it\u2019s important to conduct AI risk assessments and compliance gap analyses. Assess each system\u2019s risk level and potential impact. Review how internal records are handled, then compare current practices against the AI Act\u2019s requirements. Thereafter, close any compliance gaps.<\/p>\n<p>With this clear snapshot, implement staff training on AI ethics and regulatory obligations, in keeping with the act\u2019s call for AI literacy across staff and industry partners. Training should be role-specific \u2013 for example, legal guidance for counsel and practical instruction for product teams. Assign oversight to an entity, such as a compliance officer, to keep literacy on track.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none row-padding--bottom-none row-jump-link-section bbg-row--full-bg-bleed\" data-jump-link-label='How does the EU AI Act intersect with the GDPR, DSA, and other EU digital laws?' data-anchor='row-6a57dbf75d5b6' id='how-does-the-eu-ai-act-intersect-with-the-gdpr-dsa-other-eu-digital-laws'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>How does the EU AI Act intersect with the GDPR, DSA, and other EU digital laws?<\/h2>\n<p>The EU AI Act doesn\u2019t operate in isolation \u2013 it intersects with other major EU digital regulations.<\/p>\n<p>Since the GDPR took effect in 2018, EU lawmakers have introduced additional regimes, including the Data Governance Act (effective 2023), the Digital Markets Act (2023), the Digital Services Act (2024), and the upcoming Data Act (effective September 2025). Together, these frameworks raise critical questions about legal precedence and compliance across regimes.<\/p>\n<p>Here\u2019s a look at some of these frameworks \u2013 and how they interact with the EU AI Act.<\/p>\n<h3>GDPR and the AI Act<\/h3>\n<p>Organizations must navigate overlapping obligations under the GDPR and the EU AI Act \u2013 a task that becomes especially tricky when conducting data protection impact assessments.<\/p>\n<p>A core tension arises in the handling of sensitive personal data, such as race or health status. Under GDPR (Article 9, specifically), processing such data requires a clear legal basis, such as explicit consent or a substantial public interest. By contrast, Article 10(5) of the EU AI Act permits its use when \u201cstrictly necessary\u201d to detect or correct bias in high-risk AI systems.<\/p>\n<p>This regulatory gap creates uncertainty over which legal standard governs. For now, GDPR remains the governing framework. That means organizations must still identify a valid Article 9 basis \u2013 even when the goal is to reduce algorithmic bias or inaccuracies in AI systems.<\/p>\n<h3>DSA and the AI Act<\/h3>\n<p>The Digital Services Act (DSA) and the EU AI Act operate as parallel regulatory regimes. Yet, each addresses digital risk from a different angle.<\/p>\n<p>The DSA categorizes obligations by service type and platform scale, with the strictest requirements for very large online platforms (VLOPs). The DSA also applies to all regulated providers \u2013 regardless of AI use \u2013 and requires the mitigation of systemic risks, including harm to public welfare. Meanwhile, the AI Act classifies AI systems into four risk categories, with stricter requirements for higher-risk systems, and ties \u201csystemic risk\u201d specifically to GPAI models.<\/p>\n<p>While the DSA governs platform operations, and the AI Act regulates how AI is deployed, both impose transparency obligations. As a result, platforms using AI in customer-facing functions \u2013 such as automated content moderation \u2013 may face dual compliance with both regulations.<\/p>\n<h3>NIS2 and EU AI Act<\/h3>\n<p>The EU\u2019s updated Network and Information Security Directives (NIS2) significantly raises the bar for cybersecurity governance, with stricter requirements for management accountability, supply chain risk oversight, and incident reporting. Enforcement is also significant: Essential entities face fines up to 2% of global annual turnover; for important entities fines are up to 1.4%.<\/p>\n<p>For legal teams, it\u2019s crucial to view NIS2 and the EU AI Act as distinct, not interchangeable. NIS2 does not mandate \u201cexplainability\u201d \u2013 informing users how automated decisions are reached. That duty lies with the EU AI Act, which mandates user rights, particularly for high-risk systems.<\/p>\n<p>These different requirements make a multilayered compliance strategy critical \u2013 one that meets the demands of both cybersecurity resilience and responsible AI governance.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <section class=\"bbg-row  text--black row-padding--top-none bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf75f8d1'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column bbg-column--width-8\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>A complete tool kit for EU AI compliance from Bloomberg Law<\/h2>\n<p>Bloomberg Law\u2019s comprehensive collection of practical guidance on the EU AI Act is designed to help lawyers navigate the complexities of the law and how it impacts their organizations. The resources include overviews, compliance checklists, sample vendor compliance clause, law comparisons, and more.<\/p>\n<p>This guidance is crucial to help companies and legal teams navigate and comply with the requirements of the act. It will help companies navigate compliance and cross-border regulatory risks, manage AI in M&amp;A dealmaking, and assist with risk assessment and mitigation.<\/p>\n<p><a href=\"https:\/\/pro.bloomberglaw.com\/request-pricing\/?trackingcode-cta=BLAW25115459\">Request a demo<\/a> of Bloomberg Law to get started with actionable insights and tools.<\/p>\n\n<\/div>\n\n\n<\/div>\n\n\n                    <\/div>\n    <\/section>\n<\/div>\n\n<div  class=\"bbg-row-container\">\n    <style>section[data-anchor=row-6a57dbf761859]::before {\n\t\t\t\tbackground-color: #eeeeee;\n\t\t\t}<\/style>\n    <section class=\"bbg-row bg--custom-color  bg--eeeeee text--black bbg-row--full-bg-bleed\" data-anchor='row-6a57dbf761859'>\n        \n        \n        <div\n            class=\"bbg-row--content\"\n                    >\n            \n            <div\n    class=\"bbg-column\"\n    style=\"\"\n    >\n    <div\n\tclass=\"bb-wysiwyg\"\n\t\t>\n\t<h2>Recommended for you<\/h2>\n\n<\/div>\n<div\n    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