Key Contents of AI Basic Act

Relevant Enforcement Decree and Guidelines

Obligation to Secure AI Safety (Article 32): AI business operators with AI systems surpassing a predetermined threshold of cumulative computation used for training are required to (i) identify, assess and mitigate risks throughout the AI lifecycle, and (ii) establish risk management systems

Enforcement Decree: Specify the threshold of “cumulative computation used for training” to establish the standard for determining relevant business operators

Guidelines: Establish guidelines on the obligation to secure AI safety (administrative agency: AI Safety Institute) to specify the standards for determining relevant business operators, measures for risk identification, assessment and mitigation, methods to implement the establishment of risk management systems, and procedures to submit implementation results

Key Issue: As the above mentioned regulations on high-performance AI impose strong obligations on business operators, the standards and scope of relevant business operators will be important

Appointment of a Local Agent (Article 36): AI business operators without an address or business place in Korea that meet certain standards, such as the number of users and sales, are required to appoint a local agent in writing and report this to the Minister of the MSIT

Enforcement Decree: Specify applicable standards, such as the number of users and sales, to establish standards for determining relevant business operators

Key Issue: Important to understand the differences compared to the existing standards for designation of a local agent under the Personal Information Protection Act, the Telecommunications Business Act, and the Act on Promotion of Information and Communications Network Utilization and Information Protection

Key Contents of AI Basic Act

Relevant Enforcement Decree and Guidelines

Obligation to Secure AI Transparency (Article 31):

• Prior Notification Obligation Regarding High-Impact AI and Generative AI: When a business operator intends to provide products or services using high-impact AI or generative AI, he/she is subject to the prior notification obligation (Article 31 (1))

• Labeling Obligation Regarding Generative AI: A business operator that provides generative AI or products or services using it is subject to the labeling obligation (Article 31 (2))

• Deep Fake Notification and Labeling Obligation: A business operator that provides outputs that are difficult to distinguish from reality, such as virtual sounds or images, is subject to the notification and labeling obligation (Article 31 (3))

Enforcement Decree: Specify the methods of and exceptions from the prior notification obligation regarding high-impact AI and generative AI, the generative AI-related labeling obligation, and the deep fake-related notification and labeling obligations

Guidelines: Establish guidelines on the obligation to secure AI transparency (administrative agency: Telecommunications Technology Association (“TTA”)) to specify the detailed implementation methods and exceptions

Key Issue: The required levels of the notification and labeling obligations and exceptions will be important

AI Impact Assessment (Article 35): A business operator that provides products or services using high-impact AI is required to make efforts to conduct prior impact assessment on human basic rights

Enforcement Decree: Specify the standards and procedures of impact assessment

Guidelines: Establish guidelines on AI impact assessment (administrative agency: Korea Information Society Development Institute (“KISDI”)) to establish the details and methods of impact assessment

Key Issue: Understand the scope of impact assessment, the types of relevant basic rights, and follow-up management measures, etc.

Verification and Certification of AI Reliability (Article 30 (3)): When an AI business operator provides high-impact AI, he/she shall make efforts to obtain necessary verification and certification

Enforcement Decree: Specify the scope of relevant businesses whose verification and certification activities are supported by the MSIT and the details of administrative and financial support for SMEs

Key Issue: Understand what benefits are provided for businesses’ voluntary implementation of verification and certification activities

Key Contents of AI Basic Act

Relevant Enforcement Decree and Guidelines

High-Impact AI (Article 2 (4)): AI systems that could significantly affect human life, physical safety and fundamental rights are utilized in the areas prescribed by the proposal

Guidelines: Establish guidelines of the standards and examples of high-impact AI (administrative agency: National Information Society Agency (“NIA”)) to specify the scope of high-impact AI and detailed judgment criteria

Key Issue: As the standards and examples will be specified for each industrial sector (energy, drinking water, health and medical systems, medical devices, nuclear power, criminal investigation, arrest, employment, loan appraisal and others, transportation, public service, and education), review the impacts on each area

Review on High-Impact AI (Article 33): An AI business operator has to conduct a prior review on whether his/her system constitutes a high-impact AI, and if necessary, he/she may request for confirmation by the Minister of the MSIT

Enforcement Decree and Key Issue: It is advisable to note the legislative direction of the presidential decree because high-impact AI verification procedures will be specified in the presidential decree

High-Impact AI Business Operators’ Obligations (Article 34): A business operator that provides high-impact AI or products or services using it has the obligation to take measures to secure a certain level of safety and reliability

Enforcement Decree: Specify safety and reliability assurance measures and cases where measures required by other laws can be recognized as safety and reliability assurance measures

Guidelines: Establish guidelines on high-impact AI business operators’ obligations (administrative agency: the TTA) to specify the measures to ensure safety and reliability

Key Issue: Understand the specifics and implementation measures of each implementation obligation

Fact-Finding Investigation (Article 40): On any case of violation of a certain obligation, the Minister of the MSIT may issue a suspension or corrective order through fact-finding investigation

Enforcement Decree and Key Issue: The legislative direction of the presidential decree will be important as the scope, method, procedures and corrective order of fact-finding investigation will likely be specified in the presidential decree