Korea's AI Regulation Timeline: The Grace Period Ends
On January 22, 2026, Korea's Framework Act on the Development of Artificial Intelligence and Establishment of a Foundation for Trust (the "AI Framework Act") took full effect — the world's first comprehensive AI regulation enacted as a framework statute. A grace period followed to give businesses time to adapt. On July 21, 2026, an amended Enforcement Decree came into force, filling in the details delegated by the Act and introducing a new AI Product and Service Verification System.
The key shift is enforcement posture. During the grace period, regulators focused on guidance and corrective recommendations. Once it ends, administrative fines for non-compliance become a live risk. This is effectively the last window to get your house in order.
Are You Even in Scope? A Three-Step Self-Check
Step 1 — Identify your role. The Act distinguishes AI developers, providers (those offering AI as a service), and business users. "We don't build AI, so this doesn't apply" is a dangerous conclusion. Simply deploying a third-party SaaS AI tool in your operations can trigger disclosure and labeling duties.
Step 2 — Determine high-impact status. AI used in hiring and performance evaluation, credit and loan screening, healthcare, critical infrastructure such as energy and water, and safety-related domains falls under the high-impact AI category, which carries additional obligations. The test is whether the system materially affects people's rights or safety.
Step 3 — Check for generative AI use. If generative AI output appears in customer-facing content, chatbots, or marketing copy, you fall within the scope of prior notice and labeling (watermarking) requirements.
Six Duties You Must Review
For an SME, the minimum document set is four items: an inventory of AI systems in use, an AI disclosure notice, a safety management policy, and — for high-impact cases — a risk management and impact assessment report. Rather than creating a new team, the realistic approach is to assign the role to your existing information security or quality manager as an additional duty.
Turning Compliance Into an Asset: Building AI Governance
Three steps are enough to formalize this. 1. Establish an internal AI usage policy (permitted and prohibited uses, rules against entering confidential information) → 2. Create a pre-adoption review process (screen every new AI tool for high-impact classification and data suitability) → 3. Run periodic reviews and keep records (update the inventory semi-annually).
Layering ISO/IEC 42001 (AI Management System) certification on top makes this dramatically more efficient. Its requirements for risk management, documentation, management accountability, and continual improvement map closely onto the Act's safety measures and impact assessment provisions — meaning one documentation effort can deliver both statutory compliance and international certification.
The commercial upside is concrete. Large-enterprise supplier audits and public procurement evaluations increasingly include checks on the appropriateness and transparency of AI use. Companies with governance documentation in place are better positioned in supplier qualification screening and scoring.
Available Support Programs
How KITIM Can Help
KITIM (Korea Institute of Technology Innovation Management) provides a staged roadmap: assess your current AI usage → determine high-impact classification → document each obligation → connect to ISO/IEC 42001 certification. The goal is to convert compliance from a defensive cost into certification and sales competitiveness.
If you are unsure whether your company is in scope, or unclear on which documents to prepare first, request a consultation today. We will review your AI usage together and lay out a minimum-viable compliance plan sized to your company, along with the government support programs you can use to fund it.