On December 26, 2024, South Korea's National Assembly passed the Basic Act on the Development of Artificial Intelligence and the Establishment of Trust (the "AI Basic Act"), a comprehensive bill regulating the development and use of artificial intelligence (AI). The South Korean President has 15 days to veto the law (which expires January 10, 2025), but if no action is taken, this bill will become law.
The AI Basic Act requires the Ministry of Science, Technology, Information, and Communications (MSIT) to establish a three-year plan for the promotion of AI technology and related industries. The AI Basic Act also establishes a National AI Committee that will deliberate on matters concerning policy, investment, infrastructure, and regulations related to AI.
The AI Basic Act regulates the use of "high impact" AI, which is similar to the "high-risk" designation under the EU AI Act, and covers sensitive areas such as access to essential services, health care, and employment and hiring. Companies are required to notify users when providing products or services that use generative AI or "high-impact" AI. Additionally, if AI-generated material has the potential to confuse viewers due to photorealism, businesses must also indicate that the outputs are AI-generated.
In addition, foreign AI businesses without a Korean address must designate a domestic representative if they meet certain user or revenue thresholds that will be defined in the near future by Presidential Decree. Companies that fail to comply with these requirements could face fines of up to SK₩3 million (approximately US$20,000).
Further details will be promulgated by the MSIT and companies' obligations will change as regulations evolve to match the changing environment.
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