How Will the EU AI Act Impact Latin America?

The EU Artificial Intelligence Act (EU AI Act) entered into force on August 1, 2024, establishing a common European regulatory and legal framework for AI. On August 2, 2026, the bulk of obligations for AI systems will come into effect—making this a critical date for corporate compliance.

For the entire digital industry and international companies operating in Latin America, this is a groundbreaking regulation. The EU AI Act is poised to become a key standard defining the use of AI technology on a global scale.

One of the most consequential features of the EU AI Act is its extraterritorial reach. Building on the model established by the GDPR, the EU AI Act rules do not apply based on the location of physical infrastructure. Instead, the regulation applies to providers that market AI systems in the EU as well as providers and deployers in third countries whenever the output of their AI systems is used in the European Union.

In practice, if a Latin American company develops or uses an AI system to assess creditworthiness, manage human resources, or analyze behavioral data, and that system is offered to users in the EU or produces outputs used there, the system falls within the scope of the regulation.

The EU AI Act takes a risk-based approach, with obligations that apply regardless of company size. By August 2026, companies subject to the regulation must have audited and classified their AI systems according to the following tiers.

At the top of the pyramid, certain AI practices are banned outright as incompatible with fundamental rights. These include, for example, social scoring, subliminal, manipulative, or deceptive techniques to distort behavior, exploitation of vulnerabilities related to age, disability or socioeconomic status, untargeted scraping of images from the internet or CCTV to build facial recognition databases, and “real-time” remote biometric identification by law enforcement in public spaces (subject to narrow exceptions). These prohibitions have been in force across the EU since February 2025.

This is the core focus of the EU AI Act’s compliance framework. High-risk AI systems include certain AI used in biometrics, critical infrastructure, education and vocational training, employment and human resources management, access to essential services, law enforcement, migration and border control, and the administration of justice and democratic processes, among other areas (the list may be expanded by the European Commission). These systems require a comprehensive compliance infrastructure that encompasses risk management, data traceability, and effective human oversight.

This category includes tools such as chatbots and generative AI. The main obligation is transparency: users must be informed that they are interacting with an automated system, and synthetic or manipulated content in many cases must be labeled as such.

The full implementation of the EU AI Act in 2026 will transform international procurement. European companies are already incorporating EU AI Act-related compliance clauses into their procurement policies. Latin American companies that fail to certify the compliance of their systems may be excluded from tenders and global supply chains.

Likewise, entities outside the EU operating high-risk systems subject to the regulation will be required to appoint a legal representative within the EU, who will act as the technical and legal liaison with regulatory authorities.

A notable feature of the EU AI Act is that it introduces controlled testing environments, known as regulatory “sandboxes” (Articles 57-59). These are environments where companies can test their models under the guidance of regulators prior to launch. Each Member State must operate at least one sandbox by August 2026.

For the Latin American tech ecosystem, aligning with these standards is a strategic opportunity. Sandboxes also offer something the rest of the regime does not: early access to regulator interpretation, a structured path to conformity assessment, and an entry point into the EU market without committing to a full-scale launch.

The rigor of the EU AI Act is reflected in its enforcement regime. Fines may reach up to 35 million euros or 7% of a company’s global annual turnover. This scale elevates AI governance to a top priority in compliance programs across the region.

August 2026 marks one of the final stages in the implementation of the EU AI Act, which began in 2024. Adapting to these standards should not be interpreted as an administrative burden, but rather as an investment in operational resilience and a commitment to leading the way into the future. Latin American organizations that adopt these principles early on will not only mitigate critical legal risks, but will also position themselves as leaders in a global economy that demands responsible and transparent technology.