Cyprus consults on AI rules with fines of up to €35 million

Nicosia, Cyprus. Cyprus has opened a public consultation on two bills governing the implementation and supervision of European Union rules on artificial intelligence, with proposed penalties reaching up to €35 million in some cases.

The consultation concerns compliance with EU Regulation 2024/1689, which sets harmonised rules on artificial intelligence.

Public consultation

The Office of the Commissioner for Electronic Communications and Postal Regulation (Ocecpr) is leading the process.

Organisations and individuals may submit feedback through the e-consultation platform until September 16.

Regulatory roles

Under the proposed framework, Ocecpr will be the regulator for all artificial intelligence matters. It will also serve as the notifying authority and the single point of contact for implementing the EU regulation in Cyprus.

In its role as notifying authority, Ocecpr will be responsible for evaluation, notification and compliance. It may assign evaluation and monitoring duties to the Organisation for the Promotion of Quality.

High-risk systems and sandbox

The proposed legislation provides for an AI Regulatory Sandbox, a controlled environment in which startups and researchers can test innovative AI applications in real-world conditions.

For high-risk AI systems, Ocecpr will cooperate with other authorities responsible for their respective sectors. Such systems are defined as applications posing significant risks to people’s health, safety, fundamental rights or economic wellbeing.

The Personal Data Protection Commissioner will act as market supervisor, while the Central Bank of Cyprus will supervise high-risk AI systems used by financial institutions.