# High-Risk AI Systems--Lie Detection Application
## 2 EU AI Act
### Risks from the EU AI Act  
The EU AI Act is a comprehensive legal framework for artificial intelligence aimed at ensuring the security, transparency, and ethical use of AI technology. The Act seeks to mitigate issues associated with AI, yet it simultaneously introduces several challenges and potential risks. Various primary risks may arise from its implementation.  
Figure 1: Four-tiered pyramid of the AI risk categorization framework, classifying AI systems and applications based on their associated risk levels.  
1 Regulatory Complexity and Compliance Obligations a Significant Compliance Expenses [6]: Corporations may face considerable costs related to compliance, including extensive documentation, algorithmic assessments, and the development of risk management structures. b Disproportionate Impact on Small and Medium Enterprises (SMEs) [7]: Small and medium-sized enterprises (SMEs) often encounter financial and administrative challenges that impede innovation and limit their competitiveness compared to more giant enterprises.
2 Impact on Development and Competitiveness a Development Stagnation [8]: Strict rules may adversely affect innovation and experimentation, especially in high-risk AI systems, since enterprises would be reluctant to allocate resources to research and development owing to possible legal and financial consequences. b Competitive Disadvantage [9]: European businesses may be at a disadvantage compared to those in countries with more lenient AI regulations, as the former's technological development is being conducted within a strict framework such as the EU AI Act, which certainly affects competition for them in non-EU markets.
3 International Fragmentation and Extraterritorial Effects a Regulatory Fragmentation [6]: The EU AI Act could result in an incoherent international regulatory framework, mainly if other nations create divergent AI laws. This would make compliance very challenging for multinational companies operating in various countries. b EU AI Act's Extraterritorial Scope [7]: The EU AI Act encompasses any AI systems that affect persons in the European Union, regardless of where they come from or where they are used. Conflicts between various legal systems and difficulties doing business around the world might result from such extraterritorial jurisdiction.
4 Challenges in Terms of Implementation and Enforcement a Enforcement Discrepancies [8]: The Act requires member states to appoint national supervisory authorities, which may lead to inconsistent enforcement throughout the EU. b Capacity and Competence [10]: Ensuring that regulatory authorities possess the necessary knowledge and expertise to evaluate complex AI system is a significant barrier to effective enforcement. Inadequate resources in this area could lead to subpar supervision.
5 Data Privacy and Security Risks a Data Access [7]: Requirements to provide access to data used in AI systems for regulatory examination carry security risks, mainly when dealing with sensitive or private information.
6 Incompatibility with Accelerated Technological Advance a Lagging Regulation [8]: The rapid development of AI technology raises the issue that the legal system would become outdated or mismatched with new developments, thus becoming either overly restrictive or insufficiently legislative. These risks call for a careful weighting of regulations to protect consumers and society on the one hand while promoting innovation and maintaining global competitiveness on the other. Successful implementation and adaptation of the EU AI Act will be crucial in overcoming these risks.  
The following Figure 2 encapsulates the risks arising from the EU AI Act and their interconnections, as previously discussed.