New AI regulation impacts UK businesses

The European Union's General-Purpose AI Code of Practice officially has now come into effect. This new framework arrives one year after the EU AI Act was enacted and is aimed at establishing a standard for General-Purpose AI (GPAI) systems. Wayne Cleghorn, a partner at Excello Law and a key player in the creation of this Code, emphasises the urgency for UK businesses to evaluate whether their AI systems are subject to the new regulations.

Published by the European Commission alongside the EU AI Office, the Code outlines voluntary yet influential standards for AI technologies that are rapidly becoming integral to many industries. Cleghorn, who is also an independent expert in AI, data governance, and cybersecurity, notes, “The work to produce the Code of Practice was a world first. It was intensive, technical, and fast-paced.” He stresses that this initiative serves as a foundational starting point for AI governance, with the potential for future evolution.

While signing the Code of Practice is voluntary, there are distinct advantages for organisations that choose to comply, particularly concerning simplified enforcement procedures under the EU AI Act. Yet, Cleghorn brings attention to a pressing concern: “The reach of the EU AI Act is not limited to EU-based businesses.” He warns that UK companies developing or deploying AI systems aimed at the EU market will need to ensure compliance with the applicable legal requirements outlined in the Act.

As the EU AI Act enters its phased implementation, with significant deadlines approaching, businesses must prepare for the new landscape. By August 2025, each of the 27 EU member states will be required to appoint Notifying Authorities and Market Surveillance Authorities while also publishing local penalty frameworks. Cleghorn adds, “This phase will reveal the real-world scale of the EU’s AI regulatory framework” which will help businesses understand how enforcement will vary among jurisdictions.

Accompanying the Code are essential documents, including the AI Model Documentation Form and thorough guidance designed to aid businesses in understanding their obligations. Cleghorn notes, “This is a landmark moment in the regulation of AI,” urging companies across the UK, EU, US, and beyond to fully grasp the implications of the EU AI Act for their operations. He advises that building multidisciplinary teams and seeking specialized legal counsel is now imperative for navigating these evolving regulations.

As firms grapple with the complexities of AI compliance, proactive strategies and a commitment to understanding the nuances of the new regulatory environment will be key to their success in the coming years.