The EU AI Act Enforcement Begins – What Happens Now? (Part 3)
With February 2, 2025, marking the first major enforcement deadline of the EU AI Act, businesses must now shift from preparation to execution. Compliance is no longer a future concern—it’s a real-time business priority. In this issue, we’ll focus on what enforcement means for your organization, how regulators will assess compliance, and what steps you should take right now to ensure your AI systems remain legally sound and operational.
What Happens After February 2, 2025?
The first enforcement deadline of the EU AI Act introduces immediate bans on unacceptable-risk AI systems—including those related to manipulative techniques, real-time biometric surveillance in public spaces (with some exceptions), and social scoring. If your business is using or developing AI, now is the time to review and ensure none of your systems fall under these restrictions.
In addition, regulators will begin laying the groundwork for broader enforcement, meaning businesses must: ?? Demonstrate proactive risk management measures ?? Ensure proper documentation and transparency protocols are in place ?? Have clear oversight of AI models already in use
Failing to comply could result in severe penalties, with fines of up to €35 million or 7% of global annual turnover.
Regulatory Scrutiny: What Will Be Assessed?
Companies operating in the EU (or providing AI solutions within the region) should expect regulatory scrutiny across several key areas:
1?? AI System Categorization & Risk Assessment
2?? Technical Documentation & Compliance Reporting
3?? Data Governance & Bias Mitigation
4?? Transparency & User Protections
5?? Monitoring & Incident Reporting
Immediate Steps to Ensure Compliance
The time for planning is over—now it’s about execution. Here’s what your organization should focus on immediately:
?? Review AI Systems for Prohibited Practices – Ensure your AI solutions do not fall under banned categories and remove or adjust any high-risk applications. ?? Prepare for Compliance Audits – Regulators will require documentation proving adherence to transparency, risk management, and oversight requirements. Are you ready? ?? Strengthen Internal Governance – Assign clear AI compliance responsibilities across your leadership team to ensure accountability. ?? Train Your Teams on AI Best Practices – Compliance isn’t just about policies—it requires company-wide understanding and adoption.
What’s Next? The Road to August 2025
While the February deadline primarily affects banned AI applications, the next major milestone is August 2, 2025, when General Purpose AI (GPAI) models will be subject to stricter governance rules, transparency requirements, and risk management obligations. Businesses using or developing AI systems must start preparing now for this next phase.
In our next issue, we’ll break down the August 2025 compliance deadline, what it means for your AI strategy, and how to maintain a competitive edge in an evolving regulatory landscape.
?? Need tailored guidance? Let’s talk. Our AI compliance experts can help your business navigate the EU AI Act and develop a compliance roadmap that keeps you ahead of the curve.
?? Schedule a consultation today.
Navigating Complexity
The 2025 Compliance Landscape Demands Agility and Innovation
As we look at the compliance landscape in 2025, several key trends are shaping the field of Governance, Risk, and Compliance (GRC). These trends reflect the evolving nature of business, technology, and societal expectations, pushing organizations to adapt their compliance strategies to meet new challenges and opportunities.
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Key Compliance Trends in 2025
ESG Compliance
Environmental, Social, and Governance (ESG) compliance has become a central focus for organizations. There is increased scrutiny from investors, customers, and regulatory bodies on companies' ESG efforts. This trend emphasizes transparency in ESG initiatives, integration of ESG considerations into core business operations, and the development of standardized metrics for reporting and benchmarking ESG performance.
Technology-Driven Compliance
The integration of advanced technologies is redefining compliance processes. This includes increased automation of routine compliance tasks, the adoption of Regulatory Technology (RegTech) solutions for enhanced efficiency and real-time adherence to evolving standards, and the use of Artificial Intelligence (AI) and Machine Learning (ML) for predictive analytics and risk assessment.
Global Harmonization of Standards
As businesses continue to operate on a global scale, there is a growing push for harmonization of regulatory standards across regions. This trend involves increased collaboration between regulatory authorities to address global challenges such as cybersecurity, anti-money laundering, and data protection. The development of international compliance frameworks is also underway to provide a unified approach to common issues faced by multinational organizations.
Corporate Sustainability Due Diligence
The European Union has introduced new rules that are changing how companies approach human rights and environmental responsibility. The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are pushing businesses towards greater transparency and accountability. These regulations extend beyond European companies, affecting U.S. companies doing business in the EU as well.
Heightened Focus on Cybersecurity
With the increasing adoption of technology in financial services, there's a corresponding rise in cybersecurity threats. Regulators, including FINRA, are emphasizing the need for robust cybersecurity measures. Organizations are expected to enhance their procedures and protocols to protect firm and client data, mitigate cybersecurity risks, and have effective incident response plans in place.
Cryptocurrency Regulations
The rapid growth of cryptocurrency has led to increased regulatory attention. Compliance professionals are grappling with new challenges as regulators work to establish clear guidelines and oversight for this evolving financial technology.
These trends highlight the transformative role of technology in compliance, with automation streamlining routine tasks and AI-powered tools enabling more proactive risk management. Organizations are leveraging these innovations to navigate the complexities of compliance with greater agility and effectiveness.
As we move through 2025, compliance professionals face the challenge of balancing these evolving trends with existing regulatory demands. The key to success lies in embracing change, fostering innovation, and developing agile compliance strategies that can adapt to the rapidly changing regulatory landscape. By proactively addressing these trends, organizations can not only meet compliance requirements but also enhance their overall resilience and integrity in an increasingly complex business environment.
Notes:
[7] https://www.dhirubhai.net/pulse/whats-trending-compliance-october-2024-compliance-and-risks-etfpe
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