European Union: Entry into force with grace period of AI Act including prohibition of AI systems posing "unacceptable risk"

On 1 August 2024, the regulation laying down harmonised rules on Artificial Intelligence (Artificial Intelligence Act) enters into force, 20 days following its publication in the Official Journal, with a grace period on its implementation. The Act includes a ban on AI systems posing "unacceptable risk". The ban is applicable to cognitive behavioural manipulation, the untargeted scrapping of facial images from the internet or CCTV footage, emotion recognition in the workplace and educational institutions, social scoring, biometric categorisation to infer sensitive data, such as sexual orientation or religious beliefs, and some cases of predictive policing for individuals. The AI Act exempts systems exclusively used for military or defence purposes and those employed solely for research, innovation, or non-professional personal use. In terms of enforcement, the AI Act introduces fines for violations, calculated as a percentage of the offending company's global annual turnover. The fines are tiered, EUR 35 million or 7% for prohibited AI applications, EUR 15 million or 3% for violations of the Act's obligations, and EUR 7.5 million or 1.5% for supplying incorrect information. While the Act is generally implemented on 2 August 2026 after the lapse of the grace period, the prohibition of the listed AI systems is already implemented on 2 February 2025.