15th June 2026 Special Edition Update

Key Artificial Intelligence Regulation 

Europe

1.EU AI Act

Companies operating in the EU must comply with the EU AI Act, a risk-based framework that entered into force in August 2024 with a phased application through 2028. The EU AI Act applies to providers, developers, importers, distributors, and deployers of AI systems within the EU, regardless of whether they are based inside or outside the union. It covers both public and private entities, including those based outside the EU if their AI system’s output is used within the EU.

a. Key Entities Covered:

• Providers: Organizations/individuals developing and placing AI systems on the market (or general-purpose AI models).
• Deployers: Entities using AI systems in a professional context (e.g., businesses, public authorities).
• Importers & Distributors: Those placing AI systems from outside the EU onto the EU market.

b. Key Scope Details:

• Extraterritorial Reach: UK, US or other foreign-based companies whose AI systems affect individuals in the EU are included. The Act applies based on where the AI system is used or if the output impacts people in the EU, not just where the entity is located.
• High-Risk Focus: Strict requirements apply to AI systems in high-risk categories (e.g., education, employment, critical infrastructure).
• Exemptions: It generally does not apply to AI used for non-professional personal activities, scientific research and development, or military/defence/national security purposes

c. Key Obligations Include:

Banning specific AI practices (Article 5), implementing strict governance for high-risk systems, harmonised transparency rules for certain AI systems and promoting AI literacy among staff, harmonised rules for placing general-purpose AI models on the market. Fines can be significant (for breaches of Article 5 up to EUR 35 million or up to 7% of total worldwide annual turnover; for other breaches up to EUR 15 million or up to 3% of total worldwide turnover).