Understanding the EU AI Act
The EU AI Act (European Union Artificial Intelligence Act) is the world’s first comprehensive legal framework regulating artificial intelligence. Introduced by the European Commission in April 2021 and formally adopted in 2024, the Act aims to ensure that AI systems developed or used in the EU are safe, transparent, ethical, and respect fundamental rights. This legislation is particularly relevant to organizations that develop, deploy, or distribute AI systems across various sectors, including healthcare, finance, manufacturing, education, law enforcement, and public services.
The regulation applies not only to EU-based companies but also to any organization globally that provides AI systems or services within the EU market. It aligns with existing European data protection laws like the GDPR and is part of the broader EU digital strategy.
Risk Classification of AI Systems
The EU AI Act classifies AI systems into four risk categories:
- Unacceptable
- High
- Limited
- Minimal
Obligations scale according to the associated risk. High-risk AI systems, such as those used in biometric identification, critical infrastructure, employment, and law enforcement, are subject to strict compliance requirements.
Key Requirements for Compliance
To comply with the EU AI Act, organizations must:
- Determine the AI risk classification of their systems.
- Conduct conformity assessments for high-risk AI systems before market entry.
- Implement a quality management system (QMS) for AI lifecycle governance.
- Ensure data governance and documentation, including data training, validation, and bias mitigation.
- Establish human oversight mechanisms to ensure AI does not operate autonomously in high-risk scenarios.
- Maintain transparency by informing users when they are interacting with AI (e.g., chatbots, deepfakes).
- Register high-risk AI systems in the EU database managed by the European Commission.
Compliance steps often require coordination with multiple functions, including legal, compliance, data science, and product development teams. The Act is designed to be technology-neutral but often references complementary standards such as ISO/IEC 42001 (AI Management Systems) and ISO/IEC 23894 (AI Risk Management).
The authoritative body overseeing enforcement is the European Artificial Intelligence Office, working in coordination with national supervisory authorities across EU member states.
Benefits of Compliance
Complying with the EU AI Act isn’t just about avoiding penalties; it’s a competitive advantage. Key benefits include:
- Market access to the EU’s 450+ million consumers.
- Improved trust and brand reputation among users, investors, and partners.
- Enhanced governance and ethical AI development, leading to better long-term product sustainability.
- Alignment with global trends in AI regulation, preparing your organization for other regional laws.
Non-compliance, especially for high-risk systems, carries serious consequences:
- Fines of up to €35 million or 7% of global annual turnover, whichever is higher.
- Product bans or mandatory recalls within the EU market.
- Reputational damage, reduced customer trust, and competitive disadvantage.
Early compliance allows organizations to mitigate legal risks, drive innovation responsibly, and future-proof their operations in an evolving regulatory landscape.
Steps to Achieve Compliance
The Centraleyes risk and compliance platform is designed to guide organizations through EU AI Act compliance from start to finish. The platform helps users identify their AI system’s risk category, complete the required assessments, and collect structured evidence through an intuitive, step-by-step process. It includes built-in support for technical documentation, a remediation center to manage gaps, analytics to track progress, and tools to generate declarations and prepare for registration.
Assessment Categories
To determine which EU AI Act assessment applies to your organization, consider the following categories:
1. High-Risk AI Systems
Choose this if your system is used in sensitive or regulated areas, like hiring, education, public services, or anything involving biometric identification. Examples include:
- CV screening tools
- Automated grading systems
- Border control technologies
- Systems that affect access to jobs, loans, or housing
Requirements include filling out the high-risk compliance questionnaire, preparing technical documentation, signing a Declaration of Conformity, and registering your system with the EU.
2. Limited-Risk AI Systems
Choose this if your system interacts with people (like a chatbot or AI assistant), detects emotions or physical traits, or generates synthetic content. Requirements include answering the limited-risk assessment about transparency and ensuring users know they’re interacting with AI.
3. Minimal-Risk AI Systems
Choose this if your system doesn’t fit into the first two groups. These are everyday tools with low impact, like internal productivity software. While nothing is required by law, completing the Minimal Risk – Voluntary Best Practices Checklist Assessment is suggested.
For organizations unsure of which category their system falls into or needing assistance with the compliance process, support is available to guide them through the necessary steps.
