The EU Artificial Intelligence Act (“EU AI Act”) is the world’s first comprehensive legal framework for artificial intelligence designed to foster safe, transparent and trustworthy AI development and use in the EU. It adopts a risk-based approach by banning some AI applications and imposing strict requirements on high-risk systems.
More importantly, on the basis of the principle of extraterritoriality, it is applicable to all those businesses including the ones based in Pakistan that are developing, deploying or supplying an AI system for use in the EU. So, whether it is a SaaS product or AI-powered analytics for EU clients, Pakistani businesses must ensure compliance, including documentation, risk assessments, and human oversight. Non-compliance carries serious consequences including substantial financial penalties.
In light of the above, the EU AI Act should not just be considered a European law but a trigger for global tech governance signalling that AI systems need to be trustworthy, transparent, and secure. Therefore, for all Pakistani businesses such as exporters and tech innovators working with businesses in the EU or looking to do so, understanding and complying with the EU AI Act is of critical importance.