A proposed legal framework for implementing EU artificial intelligence rules in Cyprus could introduce fines of up to €35 million for the most serious violations. Public consultation on the legislation will remain open until September 16.

New Rules And AI Oversight

Two bills have been drafted to implement EU Regulation 2024/1689, which establishes harmonised AI rules across the bloc. Cyprus’ Office of the Commissioner for Electronic Communications and Postal Regulation (OCECPR) would become the main AI regulator, notifying authority and central point of contact.

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Feedback can be submitted through the e-consultation platform. A proposed AI Regulatory Sandbox would also give startups and researchers a controlled environment to test innovative AI applications.

For high-risk AI systems, OCECPR would work with authorities responsible for specific sectors. The Personal Data Protection Commissioner would oversee relevant systems involving personal data, while the Central Bank of Cyprus would supervise high-risk AI used by financial institutions.

Inspections And Penalties

Authorised officials could inspect business premises, request information and summon individuals to provide statements. Obstructing an official could become a criminal offence punishable by up to six months in prison, a fine of up to €10,000, or both. Administrative measures could include written warnings, orders to stop violations and the withdrawal or recall of AI systems.

Minor offences could result in fines of up to €30,000, rising to €60,000 for repeat violations. Serious breaches involving prohibited AI practices could carry penalties of up to €35 million or 7% of a company’s global annual turnover, whichever is higher.

Providers, authorised representatives, importers and distributors could face fines of up to €15 million or 3% of global turnover.

Complaints And Cyprus’ AI Strategy

Any individual or legal entity would be able to file a complaint about a suspected violation. Those who believe they have been harmed by an official decision could also appeal to the Administrative Court.

Cyprus recently unveiled its National AI Strategy 2032, which aims to modernise public administration, strengthen economic competitiveness and establish the country as a regional AI hub.

According to the strategy, the global AI market could grow from $189 billion in 2023 to $4.8 trillion by 2033, while AI and automation are expected to reshape businesses across a wide range of sectors.