EXPLAINER: Korea’s AI Basic Act
The Act on the Development of Artificial Intelligence and Establishment of Trust, commonly referred to as the AI Basic Act, was passed in South Korea on December 26, 2024. This pioneering legislation positions South Korea as the first Asian market to establish a comprehensive legal framework for artificial intelligence (AI), mirroring the efforts of the European Union with its EU AI Act. The act is set to take effect in January 2026, providing businesses with a one-year preparation window to meet its requirements.
Impact on Various Industries
According to industry experts, the AI Basic Act will significantly affect sectors that heavily rely on AI technologies. Notably:
- Mobility Sector: Autonomous vehicle systems are classified as “high-impact AI,” requiring enhanced safety assessments and transparency due to their potential impact on life, bodily safety, and fundamental rights.
- Healthcare Sector: AI systems utilized in medical devices are also categorized as high-impact, given their crucial role in health and safety. The Digital Healthcare Products Act (DHPA) governs clinical trials and quality control for such products, emphasizing the need for proactive preparation by businesses in this area.
- Financial Sector: AI applications in credit rating, recruitment, and lending processes must align with the act’s provisions, necessitating careful compliance evaluations.
Businesses using high-impact or generative AI systems are mandated to inform users if their products incorporate AI elements. For instance, any AI-generated content must be clearly labeled as such, and virtual content, including deepfake images or videos, must be accompanied by a notification explaining its origin.
Compliance Obligations
The act imposes several compliance obligations on businesses operating high-impact AI services. Key recommendations include:
- Implementing measures to identify and mitigate risks associated with AI.
- Providing clear explanations of AI-based services to users.
- Designing AI systems that allow for human monitoring and intervention.
- Maintaining comprehensive documentation to verify the safety and reliability of AI systems.
Additional obligations for high-impact AI systems encompass safety and reliability standards, risk management plans, user protection strategies, and impact assessments. Notably, the act features an extra-territorial application, requiring non-Korean businesses to designate a domestic agent in Korea when certain thresholds are met.
Comparative Analysis with Other Jurisdictions
As countries like the UK, China, and Japan deliberate on AI legislation, South Korea’s regulatory approach serves as a reference point for balancing innovation and responsible AI development. Key comparisons include:
- China: Adopted a strict regulatory framework prioritizing national security and data sovereignty.
- Singapore: Emphasizes a flexible, industry-led approach through non-binding guidelines rather than stringent enforcement.
- South Korea: Strikes a balance by fostering AI industry growth while ensuring transparency and safety, aiming to mitigate potential AI-related risks.
These differences exemplify how countries tailor their AI regulations to align with their unique economic environments and policy priorities, highlighting the critical need to assess the implications of AI regulations on national competitiveness and technological advancement.
