AI Framework Act | What the AI Framework Act, Taking Effect Next January, Requires Companies to Prepare

The AI Framework Act, namely the Framework Act on the Development of Artificial Intelligence and the Establishment of a Foundation for Trust, which is Korea's first comprehensive statute regulating artificial intelligence, will take effect next year.

With this Act, Korea becomes the second country, after the EU, to establish a comprehensive AI regulatory framework.

The AI Framework Act aims to balance two pillars: industrial growth on the one hand, and user protection and risk management on the other.

As a result, most companies that provide AI-based services, including those in manufacturing, platforms, finance, and healthcare, fall within its direct scope.

It is an Act under which compliance costs and regulatory risk may vary significantly depending on whether a company has prepared in advance.

The sections below summarize the key provisions of the AI Framework Act, together with the practical response strategies that companies should begin preparing now.

In a rapidly changing AI technology environment, the AI Framework Act sets out core concepts directly in the statute in order to clarify the standards for regulation, protection, and liability.

Article 2 provides the following basic definitions, centered on artificial intelligence systems.

Accordingly, not only AI software but also robots equipped with it, sensor-based automation devices, and edge devices may all become subject to regulation.

With these clear definitional provisions, companies are now able to identify which of their services qualify as AI and which categories they fall under.

Article 27 of the AI Framework Act clearly provides that the government is the entity responsible for addressing AI ethics issues.

Accordingly, the government may establish and announce AI ethics principles that reflect the following elements.

In addition, the Minister of Science and ICT is responsible for developing implementation measures to give practical effect to the ethics principles and for promoting the spread of ethical awareness throughout society through education and outreach.

This will also serve as a standard for companies when they establish their AI policies and internal guidelines.

The AI Framework Act also sets out the government's responsibilities.

In particular, as the draft Enforcement Decree was officially announced for public comment beginning in November 2025, concrete and practical provisions began to take shape on matters such as the criteria for determining high-impact AI, the obligation to give notice of generative AI outputs, the obligation to ensure safety, and AI impact assessments.

The government is broadly gathering opinions from industry and experts, and it plans to provide companies with a preparation period by allowing a grace period of at least one year for administrative fines at the outset.

For companies, this means that the government's regulatory direction, support direction, ethical standards, and supervisory standards are being realized within a single framework.

Accordingly, private companies should also promptly review and align their internal AI strategies, risk-management processes, and transparency notification systems.

With the enforcement of the AI Framework Act, companies will be placed in an environment where they must demonstrate the accountability, transparency, and safety of their AI development and operations.

In particular, the more a company deals with high-risk and high-impact AI, the greater its exposure to sanctions and damages if it is insufficiently prepared, so a proactive response strategy is needed.

In the era of the AI Framework Act, a preventive management system that applies legal and ethical standards from the early stages of AI development is central.

When securing training data, companies must thoroughly check for copyright infringement, and because Korea has no text and data mining (TDM) exemption, they must carefully review whether the data meets the standard under Article 35-5 of the Copyright Act (fair use of works).

Compliance with the Personal Information Protection Act must also be a baseline, and companies must systematically satisfy the legal requirements at each data-processing stage, including pseudonymization or anonymization, obtaining consent, and assessing lawful grounds.

Along with this, companies should establish dataset review to minimize algorithmic bias, the introduction of XAI (explainable artificial intelligence, a technology that explains the AI decision-making process so that humans can understand it), and an accuracy-verification system based on performance metrics (such as the F1-score).

Companies should also identify whether the AI under development qualifies as high-impact artificial intelligence and review at an early stage the additional obligations required by the AI Framework Act, such as ensuring the possibility of human intervention.

Through the National Artificial Intelligence Committee and the Artificial Intelligence Safety Institute, the government is putting in place its policy directions, safety standards, standardization efforts, and supervisory framework.

Accordingly, companies should connect these national policies with their internal AI strategies to establish an AI governance system.

By building a collaborative structure among functional departments such as technology development, data management, legal and compliance, security, and planning, and by operating documented internal rules, companies can minimize the cost of regulatory compliance.

The enforcement of the AI Framework Act carries meaning beyond stronger regulation, and it may herald a shift toward a structure in which companies that use AI safely and responsibly lead the market.

Technological capability alone is no longer sufficient, and data management, transparency, quality control, and adherence to ethical standards become new competitive factors.

In particular, for companies that use high-impact AI and generative AI, the ability to respond to regulation across the entire life cycle, from notification obligations to ensuring safety, protecting personal information, and continuous monitoring, becomes a key asset that determines the company's trustworthiness.

If you have any questions regarding internal controls for AI, risk management, the determination of high-impact AI, or responding to future regulatory risk, you are welcome to have your company's AI operating framework assessed on a tailored basis by an attorney experienced in corporate matters who can advise on the artificial intelligence industry.