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AI Watch: Global regulatory tracker

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Keeping track of AI regulatory developments around the world.

The global dash to regulate AI

Artificial intelligence (AI) has made enormous strides in recent years and has increasingly moved into the public consciousness.

Increases in computational power, coupled with advances in machine learning, have fueled the rapid rise of AI. This has brought enormous opportunities, as new AI applications have given rise to new ways of doing business. It has also brought potential risks, from unintended impacts on individuals (e.g., AI errors harming an individual's credit score or public reputation) to the risk of misuse of AI by malicious third parties (e.g., by manipulating AI systems to produce inaccurate or misleading output, or by using AI to create deepfakes).

Governments and regulatory bodies around the world have had to act quickly to try to ensure that their regulatory frameworks do not become obsolete. In addition, international organizations such as the G7, the UN, the Council of Europe and the OECD have responded to this technological shift by issuing their own AI frameworks. But they are all scrambling to stay abreast of technological developments, and already there are signs that emerging efforts to regulate AI will struggle to keep pace. In an effort to introduce some degree of international consensus, the UK government organized the first global AI Safety Summit in November 2023, with the aim of encouraging the safe and responsible development of AI around the world. 

Most jurisdictions have sought to strike a balance between encouraging AI innovation and investment, while at the same time attempting to create rules to protect against possible harms. However, jurisdictions around the world have taken substantially different approaches to achieving these goals, which has in turn increased the risk that businesses face from a fragmented and inconsistent AI regulatory environment. Nevertheless, certain trends are becoming clearer at this stage:

  1. "AI" means different things in different jurisdictions: One of the foundational challenges that any international business faces when designing an AI regulatory compliance strategy is figuring out what constitutes "AI." Unfortunately, the definition of AI varies from one jurisdiction to the next. For example, the EU AI Act adopts a definition of "AI systems" that is based on (but is not identical to) the OECD's definition, and which leaves room for substantial doubt due to its uncertain wording. Canada has proposed a similar, though more concise, definition. Various US states have proposed their own definitions, which differ from one another. And many jurisdictions (e.g., the UK, Israel, China, and Japan) do not currently provide a comprehensive definition of AI. Because several of the proposed AI regulations have extraterritorial effect (meaning more than one AI regulation may apply simultaneously), international businesses may be forced to adopt a "highest common denominator" approach to identifying AI based on the strictest applicable standard.
  2. Emerging AI regulations come in different forms: The various emerging AI regulations have no consistent legal form – some are statutes, some are executive orders, some are expansions of existing regulatory frameworks, and so on. The EU AI Act is a "Regulation" (which means that most of it will apply directly in all EU Member States, without the need for national implementation in most cases). The UK has taken a different approach, declining to legislate at this early stage in the development of AI, and instead choosing to task existing UK regulators with the responsibility of interpreting and applying five AI principles in their respective spheres. In the US, there is a mix of White House Executive Orders, federal and state initiatives, and actions by existing regulatory agencies, such as the Federal Trade Commission. As a result, the types of compliance obligations that international businesses face are likely to be materially different from one jurisdiction to the next. Many other jurisdictions have yet to decide whether they will issue sector-specific or generally applicable rules and have yet to decide between creating new regulators or expanding the roles of existing regulators, making it challenging for businesses to anticipate what form their AI regulatory relationships will take in the long term.
  3. Emerging AI regulations have different conceptual approaches: The next difficulty is the lack of a consistent conceptual approach among emerging AI regulations around the world – some are legally binding while others are not, some are sector-specific while others apply across all sectors, some will be enforced by regulators while others are merely guidelines or recommendations, and so on. As noted above, the UK approach is to use existing regulators to implement five AI principles, but with no new explicit legal obligations. This has the advantage of meaning that businesses will deal with AI regulators with whom they are already familiar but has the disadvantage that different UK regulators may interpret these principles differently in their respective spheres. The EU AI Act is cross-sectoral and creates new regulatory and enforcement powers for existing bodies, including the European Commission, and also creates entirely new bodies such as the AI Board and the AI Office, while leaving EU Member States to appoint their own AI regulators tasked with enforcing the EU AI Act. In the US, the Federal Trade Commission, Equal Employment Opportunity Commission, Consumer Financial Protection Bureau, and Department of Justice issued a joint statement clarifying that their existing authority covers AI, while various state regulators are also likely to have competence to regulate AI. International organizations including the OECD, the UN, and the G7 have issued AI principles, but these impose no legal obligations on businesses. In principle, these initiatives encourage consistency across members of each organization, but in practice this does not seem to have worked.
  4. Flexibility is a double-edged sword: In an effort to create AI regulations that can adapt to technological advances that have not yet been anticipated, many jurisdictions have sought to include substantial flexibility in those regulations, either by using deliberately high-level wording and policies, or by allowing for future interpretation and application by courts and regulators. This has the obvious advantage of prolonging the lifespan of such regulations by allowing them to be adapted to future technologies. However, it also creates the disadvantage of uncertainty because it leaves businesses uncertain of how their compliance obligations will be interpreted in the future. This is likely to mean that it is harder for businesses to know whether their planned implementations of AI will be lawful in the medium-to-long term and may make it harder to attract long-term AI investment in those jurisdictions.
  5. The overlap between AI regulation and other areas of law is complex: A substantial number of laws that are not directly focused on AI nevertheless apply to AI by association within their respective spheres, meaning that any use of AI will often trigger compliance issues and legal challenges even where there is not (yet) any enforceable AI-specific law. These areas of overlap include: IP (e.g., IP infringement issues with respect to AI model training data, and questions about copyright and patentability of AI-assisted inventions); antitrust; data protection (which adds restrictions to processing of personal data, and in some cases imposes special compliance obligations for processing carried out by automated means, including by AI); M&A (where AI innovation is driving dealmaking in many markets); financial regulation (where financial regulatory requirements may limit the ways in which AI can lawfully be deployed); litigation; digital infrastructure; securities; global trade; foreign direct investment; mining & metals; and so on. This overlap will mean that many businesses need to understand not just AI regulations in general, but also any rules that affect the use of AI in the context of the relevant sector or business activity.

Businesses in almost all sectors need to keep a close eye on these developments to ensure that they are aware of the AI regulations and forthcoming trends, in order to identify new opportunities and new potential business risks. But even at this early stage, the inconsistent approaches each jurisdiction has taken to the core questions of how to regulate AI is clear. As a result, it appears that international businesses may face substantially different AI regulatory compliance challenges in different parts of the world. To that end, this AI Tracker is designed to provide businesses with an understanding of the state of play of AI regulations in the core markets in which they operate. It provides analysis of the approach that each jurisdiction has taken to AI regulation and provides helpful commentary on the likely direction of travel.

Because global AI regulations remain in a constant state of flux, this AI Tracker will develop over time, adding updates and new jurisdictions when appropriate. Stay tuned, as we continue to provide insights to help businesses navigate these ever-evolving issues.

Articles

Australia

Voluntary AI Ethics Principles guide responsible AI development in Australia, with potential reforms under consideration.

Australia

Brazil

The enactment of Brazil's proposed AI Regulation remains uncertain with compliance requirements pending review.

Sao Paulo

Canada

AIDA expected to regulate AI at the federal level in Canada but provincial legislatures have yet to be introduced.

Canada

China

The Interim AI Measures is China's first specific, administrative regulation on the management of generative AI services.

China

Council of Europe

The Council of Europe is developing a new Convention on AI to safeguard human rights, democracy, and the rule of law in the digital space covering governance, accountability and risk assessment.

European Union

Czech Republic

The successful implementation of the EU AI Act into national law is the primary focus for the Czech Republic, with its National AI Strategy being the main policy document.

Czech Republic

European Union

The EU introduces the pioneering EU AI Act, aiming to become a global hub for human-centric, trustworthy AI.

 

European Union

France

France actively participates in international efforts and proposes sector-specific laws.

Paris

G7

The G7's AI regulations mandate Member States' compliance with international human rights law and relevant international frameworks.

G7 flags

Germany

Germany evaluates AI-specific legislation needs and actively engages in international initiatives.

Germany

India

National frameworks inform India’s approach to AI regulation, with sector-specific initiatives in finance and health sectors.

India

Israel

Israel promotes responsible AI innovation through policy and sector-specific guidelines to address core issues and ethical principles.

Israel

Italy

Italy engages in political discussions for future laws.

Milan

Japan

Japan adopts a soft law approach to AI governance but lawmakers advance proposal for a hard law approach for certain harms.

Tokyo

Kenya

Kenya's National AI Strategy and Code of Practice expected to set foundation of AI regulation once finalized.

Kenya
Kenya

Nigeria

Nigeria's draft National AI Policy underway and will pave the way for a comprehensive national AI strategy.

Nigeria
Nigeria

Norway

Position paper informs Norwegian approach to AI, with sector-specific legislative amendments to regulate developments in AI.

Norway

OECD

The OECD's AI recommendations encourage Member States to uphold principles of trustworthy AI.

country flags

Saudi Arabia

Saudi Arabia is yet to enact AI Regulations, relying on guidelines to establish practice standards and general principles.

Riyadh_Hero_1600x600 Saudi Arabia

Singapore

Singapore's AI frameworks guide AI ethical and governance principles, with existing sector-specific regulations addressing AI risks.

Singapore

South Africa

South Africa is yet to announce any AI regulation proposals but is in the process of obtaining inputs for a draft National AI plan.

Johannesburg

South Korea

South Korea's AI Act to act as a consolidated body of law governing AI once approved by the National Assembly.

Korea

Spain

Spain creates Europe's first AI supervisory agency and actively participates in EU AI Act negotiations.

Madrid

Switzerland

Switzerland's National AI Strategy sets out guidelines for the use of AI, and aims to finalize an AI regulatory proposal in 2025.

Switzerland

Taiwan

Draft laws and guidelines are under consideration in Taiwan, with sector-specific initiatives already in place.

Taiwan city

Turkey

Turkey has published multiple guidelines on the use of AI in various sectors, with a bill for AI regulation now in the legislative process.

Türkiye

United Arab Emirates

Mainland UAE has published an array of decrees and guidelines regarding regulation of AI, while the ADGM and DIFC free zones each rely on amendments to existing data protection laws to regulate AI.

UAE

United Kingdom

The UK prioritizes a flexible framework over comprehensive regulation and emphasizes sector-specific laws.

London hero image

United Nations

The UN's new draft resolution on AI encourages Member States to implement national regulatory and governance approaches for a global consensus on safe, secure and trustworthy AI systems.

United Nations

United States

The US relies on existing federal laws and guidelines to regulate AI but aims to introduce AI legislation and a federal regulation authority.

New York city photo

Contacts

Tim Hickman
Partner
London
Erin Hanson
Partner
New York
Dr. Sylvia Lorenz
Partner
Berlin
Sao Paulo

AI Watch: Global regulatory tracker - Brazil

The enactment of Brazil's proposed AI Regulation remains uncertain with compliance requirements pending review.

Insight
|
8 min read

Laws/Regulations directly regulating AI (the “AI Regulations”)

Brazil intends to regulate AI through Bill No. 2,338/2023 ("Brazil's Proposed AI Regulation"), although there are currently no specific codified laws, statutory rules or regulations in Brazil that directly regulate AI. 

Status of the AI Regulations

When Brazil's Proposed AI Regulation will come into effect, and what its final text will entail, remains unclear. It must yet be scrutinized and voted on in both the Federal Senate and the House of Representatives, before being approved by the president, and so the details remain subject to change. There is currently no expected date for the next developments in the legislative procedure.

Other laws affecting AI

There are various laws that do not directly seek to regulate AI but may affect its development or use in Brazil. A non-exhaustive list of key examples includes:

  • Law No. 13,709/2018 (General Data Protection Law) (the "Brazilian Data Protection Law"), which provides for the processing of personal data.2
  • Law No. 8,078/1990 (Consumer Protection Code), which provides for consumer protection.3
  • Law No. 9,610/1998 (Copyright Law), which provides for authors' rights and those related to them.4

Intellectual property laws may affect several aspects of AI development and use.

Definition of “AI”

Given Brazil's Proposed AI Regulation is not yet law, there is currently no legally recognized definition of AI in Brazil. Nevertheless, at the time of publication, Brazil's Proposed AI Regulation defines an AI system as "a computational system, with varying degrees of autonomy, designed to infer how to achieve a given set of objectives, using approaches based on machine learning and/or logic and knowledge representation, through input data from machines or humans, with the aim of producing predictions, recommendations, or decisions that may influence the virtual or real environment."5

Territorial scope 

Brazil's Proposed AI Regulation currently has a broad territorial scope. Based on the current draft, it will apply to the development, implementation, and use of AI systems within Brazilian territory, without making a distinction between national and foreign entities.

Sectoral scope 

Brazil's Proposed AI Regulation does not currently adopt a sector-specific focus. Based on the current draft, it will apply to the development, implementation, and use of AI systems irrespective of sector.

Compliance roles

Brazil's Proposed AI Regulation will introduce obligations for the following AI system agents:

  •  AI system provider – being "a natural or legal person, whether public or private, that develops an AI system, directly or by commission, with the intention of placing it on the market or applying it in a service provided by them, under their own name or brand, for consideration or free of charge."6
  •  AI system operator – being "a natural or legal person, whether public or private, that employs or uses an AI system on their own behalf or for their benefit, unless the said system is used within the scope of a non-professional personal activity."7

Core issues that the AI Regulations seek to address

Brazil's Proposed AI Regulation aims to protect fundamental rights and ensures the implementation of secure and reliable systems for the benefit of the human person, the democratic regime, and scientific and technological development. 

Risk categorization

Brazil's Proposed AI Regulation categorizes AI systems according to different levels of risk:

  • Excessive-risk AI systems include (among others) those AI systems that: (i) employ subliminal techniques to induce behavior in others that is detrimental or dangerous to their health or safety, or against the principles of Brazil's Proposed AI Regulation; (ii) exploit vulnerabilities of specific groups of persons (e.g., age, or physical or mental disability), to induce behavior that is detrimental to their health or safety, or against the principles of Brazil's Proposed AI Regulation; or (iii) are implemented by the government for the purposes of social scoring. Such excessive-risk AI systems will be prohibited, while others will be subject to regulation by the competent authority. 
  • High-risk AI systems include AI systems used for certain purposes, such as (among others): (i) security devices in critical infrastructures (such as traffic control, water, and electricity supply networks); (ii) credit assessments; (iii) certain autonomous vehicles; (iv) applications in the healthcare sector; (v) biometric identification systems; and (vi) criminal investigation and public security.

Every AI system shall undergo a preliminary assessment conducted by the supplier to classify its degree of risk, and risk assessments must be undertaken prior to the AI system being placed onto the market or used in service.8

Key compliance requirements

Brazil's Proposed AI Regulation aims to establish a detailed approach to compliance requirements. By way of an example, Brazil's Proposed AI Regulation currently requires: 

  • AI system providers to conduct preliminary assessments to classify the risk level of the AI system before its placement on the market; and
  • AI system providers and operators: (i) to conduct algorithmic impact assessments when requested by the competent authority, or whenever the AI system is deemed high-risk by the preliminary assessment; and (ii) to report serious security incidents to the competent authority.9

AI system providers and operators must also establish governance structures and internal processes capable of ensuring the security of systems and compliance with the rights of affected individuals, which shall include, at least:

  • transparency regarding the use of AI systems in interacting with natural persons, and the governance measures adopted in the development and use of the AI system by the organization;
  • adequate data management measures for the mitigation and prevention of potential discriminatory biases;
  • the legitimization of data processing in accordance with data protection legislation, including through the adoption of privacy measures from the design stage and by default, and the adoption of techniques that minimize the use of personal data;
  • the adoption of appropriate parameters for the separation and organization of data for training, testing, and the validation of the system's results; and
  • the adoption of appropriate information security measures from the design stage to the operation of the system.10

In addition, AI system providers and operators of high-risk AI systems must adopt the following governance measures and internal processes:

  • the operation of the system and the decisions involved in its construction, implementation, and use must be documented;
  • automatic logging tools for system operation must be used in order to: (i) allow for the evaluation of its accuracy and robustness; (ii) identify potential discriminatory issues; and (iii) appropriately implement risk mitigation measures, with special attention to adverse effects;
  • tests to assess appropriate levels of reliability, according to the sector and type of application of the AI system, must be conducted;
  • data management measures to mitigate and prevent discriminatory biases must be adopted; and
  • technical measures to enable explainability of the results of AI systems, and to provide general information about the operation of the model, must be adopted.11

Regulators

The Executive Branch is expected to designate a competent authority, which will be the agency or entity of the Federal Public Administration responsible for implementing and overseeing Brazil's Proposed AI Regulation.12  It is still unclear whether this authority will be a new or existing agency, such as the National Data Protection Authority.

Enforcement powers and penalties 

Pursuant to Brazil's Proposed AI Regulation, the competent authority will have a range of enforcement measures to consider. Specifically, the competent authority may:

  • Order: (i) the reclassification of the AI system's risk level; (ii) an AI system agent to conduct algorithmic impact assessments to guide ongoing investigations; or (iii) an AI system agent to take measures to reverse or mitigate the effects of a serious security incident.
  • Administer: (i) a warning; or (ii) a simple fine of up to R$ 50,000,000.00 (fifty million Brazilian reais) per violation, being, in the case of a private legal entity, up to 2% (two percent) of the group's revenue for the preceding fiscal year.
  • Publicize the violation after it has been duly investigated and confirmed.
  • Prohibit or restrict: (i) the AI system from participating in the regulatory sandbox regime provided for in Brazil's Proposed AI Regulation, for up to five years; or (ii) processing from certain databases.
  • Suspend the development, supply, or operation of the AI system on a partial or total, and temporary or permanent, basis. 

Additionally, as a general rule in Brazil, individuals and legal entities that violate the law and cause harm to others, whether material or moral, may be ordered by a court to pay compensation.

1 See Brazil's Proposed AI Regulation here. It was proposed on May 3, 2023 before the Federal Senate.
2
See the Brazilian Data Protection Law here.
3
See Law No. 8,078/1990 here.
4
See Law No. 9,610/1998 here
5
See Article 4, I of Brazil's Proposed AI Regulation.
6
See Article 4, II of Brazil's Proposed AI Regulation here
7
See Article 4, III of Brazil's Proposed AI Regulation here.
See Article 13 of Brazil's Proposed AI Regulation here.
9
See Article 31 of Brazil's Proposed AI Regulation here. "Serious security incidents" include, for example, when there is a risk to the life and physical integrity of individuals, disruption of critical infrastructure operations, serious damage to property or the environment, as well as serious violations of fundamental rights.
10
See Article 19 of Brazil's Proposed AI Regulation here
11
See Articles 19 and 20 of Brazil's Proposed AI Regulation here. Certain further information must also be provided upon request, while respecting industrial and commercial confidentiality.
12 
See Articles 4, V, 32 and 33 of Brazil's Proposed AI Regulation here

White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.

This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

© 2024 White & Case LLP

Daniel Mair (Trainee Solicitor, White & Case, Paris) contributed to this publication.


Pinheiro Neto Advogados contributors

Ciro Torres Freitas

Ciro Torres Freitas
Partner, Pinheiro Neto Advogados
+55 11 32478781
cfreitas@pn.com.br

André Zonaro Giacchetta

André Zonaro Giacchetta
Partner, Pinheiro Neto Advogados
+55 11 32478968
azgiacchetta@pn.com.br

 

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