Compliance functions are largely unprepared for the European Union’s AI Act, with many still unaware of what artificial intelligence their organizations are using or the risks the technology poses to their business, according to experts.
The legislation, which applies throughout the European Union but also has extraterritorial effect, is due to be finalized by the end of the year and come into force by 2027. Companies breaching the rules could face fines up to 6 percent of global turnover or 30 million euros (U.S. $33 million)—whichever is higher.
Chris Eastham, a technology partner at law firm Fieldfisher, said compliance functions “do not yet have a full enough grasp of their AI risk exposure,” while governance measures are “piecemeal or nonexistent” in most businesses.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec.
Trial Membership
First week free, then $499 for an annual Membership
Cancel anytime within the trial period.
Annual Membership best value
Subscribe now for $365
Our lowest price ($1 per day) for one year.
Not all companies can rely on bans or restrictions to employee use of generative artificial intelligence like ChatGPT. Instead of telling people what they can’t do, focus on what they can do.
The European Union wants to bolster tech innovation within the single market as artificial intelligence is predicted to catapult economic growth, but some have expressed fears AI use might conflict with levels of automatic protection expected under the General Data Protection Regulation.
The possibilities for productive use of generative AI are alluring, compliance professionals say. But harnessing the technology in an ethical and compliant manner requires thorough risk assessment.
The Securities and Exchange Commission adopted amendments to its rule covering fund names to ensure the regulation is appropriate to address new investment drivers, namely environmental, social, and governance matters.
The actions of companies like Amazon and new legislation passed in California prove it’s no longer a question of if companies will be required to disclose their greenhouse gas emissions—it’s a question of when, experts told attendees at CW’s virtual ESG Summit.
Nearly three months from the effective date of its beneficial ownership reporting rule, the Financial Crimes Enforcement Network released guidance for small businesses to determine whether they must comply and what information they might be required to provide.
