Artificial Intelligence Act

In mid-March 2023, the final text of the Regulation laying down harmonised rules on Artificial Intelligence (AI Act) was formally approved by the European Parliament at plenary session. The AI rules establish obligations for AI based on its potential risks and level of impact (risk-based approach). Internal Market Commissioner Thierry Breton said: “The EU becomes the very first continent to set clear rules for the use of AI”.

The AI rules ban certain AI applications that threaten citizens’ rights and foresee obligations for other high-risk AI systems (due to their significant potential harm to health, safety, fundamental rights, environment, democracy and the rule of law). Examples of high-risk AI uses include evaluation for creditworthiness or credit scoring for natural persons. Such systems must assess and reduce risks, maintain use logs, be transparent and accurate, and ensure human oversight.

The Council of the EU formally approved the final text in May 2024, and it will now be published in the EU’s Official Journal and enter into force on the twentieth day following that of its publication. The AI Act will be fully applicable 24 months after its entry into force, except for a few provisions.

Leaseurope is closely monitoring the implementation process of the AI Act, particularly the upcoming guidelines expected to be issued by the European Commission. The guidelines will specify the classification of AI systems together with a list of practical examples of use cases of AI systems that are high-risk and are not high-risk. Leaseurope believes that the application of logistic regression in constructing a credit scoring model (or other similar statistical systems) cannot be considered as high-risk AI systems under the definition of AI Act due to lack of autonomy, adaptiveness, and the ability for advanced learning, reasoning, and modelling.