HOW TO KNOW IF YOUR COMPANY NEEDS EU AI ACT COMPLIANCE | 5-MINUTE CHECKLIST

A PRACTICAL GUIDE FOR OPERATORS, INVESTORS, AND LEGAL TEAMS NAVIGATING AI REGULATION

“Does the EU AI Act apply to my company?”

If you’re deploying AI systems in global markets—even from outside the EU—you may already be in scope. This guide offers a five-question diagnostic to assess exposure and outlines what to do next.

The European Union’s AI Act is the world’s first major AI regulation. It applies extraterritorially—meaning U.S., LATAM, and APAC companies can be liable if their AI systems reach EU users, markets, or infrastructure.

Whether you're a tech operator, compliance lead, or institutional investor, this short framework helps you clarify whether the law affects your company, your vendors, or your portfolio.

WHY AN AI COMPLIANCE CHECKLIST MATTERS

The EU AI Act doesn’t just target European tech giants. It applies to any company whose AI systems touch the EU market—whether via product deployment, user data, or supply chain integrations.

Not having an AI compliance checklist (or framework) can result in fines of up to €35 million or 7% of global turnover. But not every company is in scope.

This five-minute diagnostic is a fast way to assess your potential exposure.

5-MINUTE EU AI ACT EXPOSURE DIAGNOSTIC

Answer yes/no to the following:

1. Does your company sell, deploy, or operate AI systems in the EU?

Includes tools like:

• Customer-facing chatbots

• Recommendation engines

• Fraud or risk scoring models

• Industrial AI in manufacturing or logistics

→ If yes: Your company is directly in-scope as a provider or deployer.

2. Is your AI embedded in a physical product sold in the EU?

Examples include:

• Connected medical devices

• AI-equipped robotics

• Smart energy meters

→ If yes: You must comply with both the AI Act and EU product safety laws.

3. Does your AI system support high-risk functions?

Covered areas include:

• Hiring and employee evaluation

• Biometric surveillance or access control

• Creditworthiness or insurance underwriting

• Education and public service eligibility

→ If yes: You fall under the High-Risk category, triggering additional obligations on transparency, human oversight, and data governance.

4. Do you import, integrate, or resell third-party AI systems in the EU?

• Includes embedded APIs, white-labeled platforms, or bundled solutions.

→ If yes: You may be liable as a distributor or importer—with legal duties to verify documentation and conduct post-market monitoring.

5. Are you building or fine-tuning general-purpose models (e.g., GPT, LLaMA, Claude)?

Especially if models are trained on EU datasets or accessible to EU users.

→ If yes: You are subject to a new regulatory category: General-Purpose AI Providers—with obligations to disclose risks, ensure cybersecurity, and comply with copyright transparency.

WHAT HAPPENS IF YOU’RE IN SCOPE?

If you answered yes to any of the above, start by:

• Mapping your AI systems across business units and geographic markets

• Classifying your risk level under the Act (Minimal, Limited, High, or Prohibited)

• Identifying your legal role (Provider, Deployer, Importer, Distributor)

• Building your internal documentation—especially for systems in HR, finance, logistics, and healthcare

• Tracking the timeline: Most obligations begin between 2025 and 2026, depending on category

YOU MIGHT BE ASKING:

• Do U.S. companies need to comply with the EU AI Act? → Yes, if they operate AI systems accessible in the EU.

• How do I know if my AI is “high-risk”? → It depends on your use case and impact on individuals’ rights or access to services.

• What if my vendor’s AI is non-compliant? → You may still be liable depending on your role in distribution or deployment.

LOOKING AHEAD

For mid-cap companies and investors with global operations, the EU AI Act is just the beginning. The U.S., Brazil, and ASEAN economies are drafting similar frameworks.

Getting ahead now means fewer surprises later.

Emergent Line advises companies on strategic, regulatory, and geopolitical shifts tied to AI adoption, without overengineering the solution.

So, ask your team:

“Do we have a checklist for EU AI Act exposure?”

If not, or if you're unsure how exposed your business is or where to start, our team can help clarify scope and next steps.

→ Contact Emergent Line and Request a 20-minute consultation.

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