Germany is moving forward with legislation to implement the European Union’s Artificial Intelligence Act, a landmark regulatory framework for AI development and deployment. The draft law, known as the KI-Marktüberwachungs- und Innovationsförderungsgesetz (KI-MIG) – or AI Market Surveillance and Innovation Promotion Act – aims to establish a national structure for overseeing and fostering responsible AI innovation within the country.
Implementing the EU AI Act
The EU AI Act, which came into force in , categorizes AI systems based on risk level, imposing stricter regulations on those deemed “high-risk.” These high-risk systems, which could include applications in critical infrastructure, healthcare, and law enforcement, will be subject to rigorous testing and certification requirements. The KI-MIG doesn’t introduce new substantive obligations beyond those outlined in the EU AI Act; instead, it focuses on establishing the German authorities responsible for enforcing the regulation and supporting innovation.
As noted in the draft legislation, the KI-MIG addresses organizational and procedural obligations for member states, including the designation of market surveillance and notifying authorities, rules for national enforcement procedures (specifically, Bußgeldverfahren, relating to fines), and measures to promote innovation, such as regulatory sandboxes.
Key Authorities and Responsibilities
The publication of the draft law initiated a consultation phase with federal states and industry associations. A central component of the KI-MIG is the designation of the Bundesnetzagentur (BNetzA) – the Federal Network Agency – as the primary market surveillance authority for AI Act compliance. This agency will act as a central point of contact for businesses navigating the new regulatory landscape.
However, Germany will maintain a decentralized supervisory structure, preserving the roles of existing sectoral authorities in their respective domains. This means that, for example, authorities overseeing financial services will continue to regulate AI applications within that sector. An Independent Market Surveillance Chamber (UKIM) will be established to provide oversight of sensitive high-risk AI systems.
The BNetzA will also host an AI Service Desk to provide support and guidance to businesses seeking to comply with the AI Act. This is intended to streamline the compliance process and reduce the burden on companies, particularly small and medium-sized enterprises (SMEs).
Promoting AI Innovation
Recognizing the importance of fostering innovation alongside regulation, the KI-MIG also includes provisions for establishing AI regulatory sandboxes. These sandboxes will allow companies to test and develop AI systems in a controlled environment, with reduced regulatory requirements. This approach, sometimes referred to as “reallabs,” aims to encourage experimentation and accelerate the development of beneficial AI applications.
Enforcement and Penalties
The KI-MIG establishes the framework for enforcing the EU AI Act within Germany, including procedures for imposing fines for non-compliance. While the EU AI Act itself outlines potential penalties, the German legislation clarifies how these penalties will be applied at the national level. According to a guide published by GLACIS, penalties could reach up to €35 million.
Direct Applicability and the Role of Data Protection Authorities
It’s important to note that the EU AI Act is directly applicable across all member states, meaning that German organizations are already obligated to comply with its requirements, regardless of the status of the national implementing legislation. The KI-MIG primarily focuses on establishing enforcement mechanisms and clarifying the roles of national authorities.
However, questions remain regarding the interplay between the KI-MIG and Germany’s existing data protection regulations, particularly concerning the role of German data protection authorities under the EU AI Act. The treatment of compliance management systems in fine proceedings is also an area requiring further clarification, as highlighted by Simmons & Simmons.
Legislative Process and Next Steps
The publication of the KI-MIG draft in marked the beginning of a consultation phase with Germany’s federal states and industry associations. The draft law was delayed due to unscheduled parliamentary elections earlier in . The new Federal Government is expected to enact the KI-MIG in the latter half of , though the EU AI Act’s requirements are already in effect. The draft was published as a “referentenentwurf,” meaning It’s a federal draft and has not yet been submitted to the federal cabinet, Bundestag, or Bundesrat for legislative proceedings.
Federal Digital Minister Karsten Wildberger emphasized the government’s commitment to balancing governance with innovation, stating, “We are committed to AI governance for Germany that promotes innovation and is as streamlined as possible. If we want to see more AI developments from Germany and Europe, we must create a practical framework for companies.”
