South Korea on Thursday formally enacted a comprehensive law governing the safe use of artificial intelligence (AI) models, becoming the first country globally in doing so, establishing a regulatory framework against misinformation and other hazardous effects involving the emerging field.

The Basic Act on the Development of Artificial Intelligence and the Establishment of a Foundation for Trustworthiness, or the AI Basic Act, officially took effect Thursday, according to the science ministry.

It marked the first governmental adoption of comprehensive guidelines on the use of AI globally.

The act centers on requiring companies and AI developers to take greater responsibility for addressing deepfake content and misinformation that can be generated by AI models, granting the government the authority to impose fines or launch probes into violations.

In detail, the act introduces the concept of “high-risk AI,” referring to AI models used to generate content that can significantly affect users’ daily lives or their safety, including applications in the employment process, loan reviews and medical advice.

Entities harnessing such high-risk AI models are required to inform users that their services are based on AI and are responsible for ensuring safety. Content generated by AI models is required to carry watermarks indicating its AI-generated nature.

“Applying watermarks to AI-generated content is the minimum safeguard to prevent side effects from the abuse of AI technology, such as deepfake content,” a ministry official said.

Global companies offering AI services in South Korea meeting any of the following criteria –global annual revenue of 1 trillion won (USD681 million) or more, domestic sales of 10 billion won or higher, or at least 1 million daily users in the country – are required to designate a local representative.

Currently, OpenAI and Google fall under the criteria.

Violations of the act may be subject to fines of up to 30 million won, and the government plans to enforce a one-year grace period in imposing penalties to help the private sector adjust to the new rules.

The act also includes measures for the government to promote the AI industry, with the science minister required to present a policy blueprint every three years.