South Korea's Comprehensive AI Basic Act: A New Era in AI Regulation

Note: This article represents a practitioner’s interpretation of the relevant rules and regulations in place at the time of writing. I am not a lawyer, and readers should consult with their own legal counsel and compliance teams before taking any action based on this information.

South Korea has emerged as a pioneer in AI regulation with the passage of its groundbreaking AI Basic Act in January 2024, establishing one of the world’s most comprehensive regulatory frameworks for artificial intelligence. This landmark legislation represents South Korea’s commitment to fostering innovation while ensuring robust oversight of AI development and deployment.

For US-based AI developers, here’s the bottom line: If you’re deploying AI systems in South Korea or targeting Korean users, you’ll need to prepare for a risk-based regulatory framework that takes effect in January 2026. Unlike the patchwork approach in the US, Korea’s system will require registration of high-risk AI systems, mandatory risk assessments, and content labeling for generative AI. The framework will particularly impact those working in healthcare, transportation, and financial services. While the detailed implementation rules are still being developed, now is the time to begin mapping your AI systems against Korea’s risk categories and establishing compliance processes. The good news? Korea’s approach emphasizes innovation alongside regulation, with substantial government investment in AI infrastructure that US companies can potentially leverage.

The Foundation of Korea’s AI Regulation

The AI Basic Act reflects South Korea’s technological leadership and its proactive approach to emerging challenges in the digital age. Unlike more general frameworks seen in other jurisdictions, South Korea’s legislation provides a structured approach to AI governance with specific requirements that will be further detailed through upcoming Presidential Decrees and Ministerial Ordinances. The Act creates a clear roadmap for organizations operating in this space, with full implementation expected by January 2026.

Core Framework and Requirements

At the heart of South Korea’s approach lies a risk-based system that categorizes AI systems based on their potential impact. The framework introduces three key classifications:

1. General AI Systems: Basic requirements applicable to all AI systems
2. High-Risk AI Systems: More stringent obligations for systems with significant potential impact
3. Prohibited AI Systems: Certain applications that are outright banned due to unacceptable risks

Organizations developing or deploying AI systems must navigate these classifications, with specific requirements for registration, risk management, and human oversight varying by category. The Act establishes a comprehensive AI governance framework that includes the creation of a dedicated AI Policy Committee and an AI Ethics Committee to oversee implementation and ethical considerations.

Technical Standards and Implementation

The technical implementation of South Korea’s framework will demand sophisticated approaches to system architecture, data management, and monitoring. While the specific technical standards are still being developed through upcoming Presidential Decrees, organizations should prepare for requirements around safety, security, and testing protocols.

Data management takes center stage in the framework, with the Act emphasizing the importance of high-quality data for AI development while respecting privacy considerations. The legislation works in conjunction with Korea’s existing Personal Information Protection Act to ensure appropriate data handling practices.

High-Risk AI Systems and Special Considerations

For high-risk AI systems, the framework establishes particularly rigorous requirements. Organizations must register these systems with the government, conduct thorough risk assessments, and implement appropriate safeguards. The exact criteria for what constitutes a “high-risk” system will be defined in forthcoming Presidential Decrees, but will likely include AI applications in critical sectors like healthcare, transportation, and financial services.

The framework pays special attention to generative AI, recognizing its unique challenges and potential impacts. The Act includes provisions for transparency in AI-generated content, requiring appropriate labeling and disclosure to protect against misinformation and harmful applications.

International Compliance and Cross-Border Operations

South Korea’s framework includes provisions for international operations, recognizing the global nature of AI development and deployment. The Act allows for mutual recognition of foreign AI regulations that meet equivalent standards, potentially easing compliance burdens for multinational organizations. However, companies operating in Korea should prepare for potential requirements regarding local representation and data governance.

Innovation Support and Government Initiatives

While establishing robust regulatory requirements, South Korea’s framework also emphasizes innovation support. The Act includes provisions for regulatory sandboxes and government-led initiatives to promote AI development. The government has committed approximately 9.4 trillion won (around $7 billion USD) through 2027 for AI infrastructure and research, including the establishment of the AI Computing Center, which provides crucial resources for both academic research and industrial applications.

Looking Forward: Evolution and Adaptation

The regulatory landscape will continue to evolve as the Presidential Decrees and Ministerial Ordinances are developed throughout 2024. Organizations should expect further clarification of requirements, particularly around the classification of high-risk systems, technical standards, and compliance mechanisms. Success in this environment requires maintaining flexible compliance strategies that can adapt to these emerging requirements while supporting continued innovation.

Enforcement and Penalties

The Act introduces significant penalties for non-compliance, including fines of up to KRW 30 million (approximately $20,870 USD) and potential imprisonment for serious violations. The Ministry of Science and ICT will develop detailed implementation plans and enforcement mechanisms. Organizations should take these penalties seriously and ensure they have robust compliance processes in place well before the enforcement date.

Practical Implementation Strategies

Organizations operating under South Korea’s framework should begin preparing now, even as the detailed requirements are still being developed. This includes:

1. Conducting AI inventories to identify systems that may fall under high-risk categories
2. Developing risk assessment frameworks aligned with the Act’s principles
3. Establishing documentation systems to track compliance efforts
4. Engaging with industry associations to stay informed of regulatory developments
5. Designating responsible personnel or a domestic representative to manage compliance obligations

The cultural context plays a crucial role in successful implementation. Organizations must understand both the technical requirements and the broader business environment in Korea, including the government’s dual emphasis on innovation and responsible AI development.

Conclusion

South Korea’s AI Basic Act represents a significant milestone in AI regulation, establishing a comprehensive framework while supporting innovation. The Act strikes a balance between protecting against potential harms and fostering technological advancement. Organizations must carefully navigate these requirements as they evolve, balancing compliance obligations with development objectives. Success requires staying informed of regulatory developments and maintaining a commitment to responsible AI development.

References

1. National Assembly of Korea. (2024). “Framework Act on Artificial Intelligence (AI Basic Act).” https://iapp.org/news/a/analyzing-south-korea-s-framework-act-on-the-development-of-ai

2. Ministry of Science and ICT. (2024). “National AI Innovation Strategy.” https://wp.oecd.ai/app/uploads/2021/12/Korea_National_Strategy_for_Artificial_Intelligence_2019.pdf

3. White & Case. (2024). “AI Watch: Global Regulatory Tracker - South Korea.” https://www.whitecase.com/insight-our-thinking/ai-watch-global-regulatory-tracker-south-korea

4. Personal Information Protection Commission. (2024). “Guidelines for AI Personal Data Protection.” https://www.pipc.go.kr/eng/user/ltn/new/noticeDetail.do?bbsId=BBSMSTR_000000000001&nttId=2275

5. OneTrust. (2025). “South Korea’s new AI law: What it means for organizations and how to prepare.” https://www.onetrust.com/blog/south-koreas-new-ai-law-what-it-means-for-organizations-and-how-to-prepare/