Taiwan's Basic AI Law Passed! What to Do If You Lose Your Job Due to AI? How to Handle AI scams? Key points of the legislation at a glance

The Legislative Yuan passes the AI Basic Law in the third reading, establishing seven governance principles. This is a comprehensive overview of the AI Basic Law, clearly explaining the seven principles and how the statutes respond to the most concerns of the public.

AI Basic Law passes in third reading, Taiwan moves from declaration to legal implementation

On 12/23, Taiwan’s Legislative Yuan officially passed the “AI Basic Law” in the third reading, not only establishing the legal foundation for AI development in Taiwan but also marking a new milestone in Taiwan’s AI governance field. The central competent authority for the AI Basic Law is the National Science and Technology Council, and the local authorities are the various county and city governments.

Regarding the smooth passage of the AI Basic Law, Cai Ming-shun, Dean of Taiwan AI School, believes that the passage of the Basic Law signifies that Taiwan’s AI governance has officially moved from policy declaration to legal implementation.

He analyzes that the next challenge will be the formulation of “effect laws” by various ministries and commissions, such as the Financial Supervisory Commission’s regulations on financial applications, the Ministry of Health and Welfare’s medical certification, and the Ministry of Economic Affairs’ manufacturing standards.

AI Basic Law’s seven principles and main statutes overview

What is the definition of AI?

According to the content of the draft of the AI Basic Law passed in the third reading, artificial intelligence (AI) is defined as a system capable of autonomous operation, which, through input or sensing, utilizes machine learning and algorithms to produce outputs such as predictions, content, recommendations, or decisions.

Image source: AI generated by NotebookLM, for reference only. Some text may be blurry, please forgive.

Seven Principles of the AI Basic Law

To ensure that technological development stays on the right track, the bill clearly reveals the “seven principles” that the government must follow when promoting AI research and application:

Sustainability

Balance social fairness and environmental sustainability, reduce digital divide.

Human Autonomy

Respect human rights and cultural values, allow human supervision, and implement a people-centered approach.

Privacy Protection and Data Governance

Properly protect personal data, implement data minimization principles.

Security

Establish cybersecurity measures to prevent attacks and threats.

Transparency and Explainability

Appropriately label or disclose AI-generated information to enhance trustworthiness.

Fairness

Avoid biases or discrimination in algorithms targeting specific groups.

Accountability

Developers and users should bear corresponding governance and social responsibilities.

In terms of organizational structure, the Executive Yuan will establish a National AI Strategy Committee, convened by the Premier, responsible for setting the national AI development guidelines, with administrative operations handled by the National Science and Technology Council.

Additionally, the Ministry of Digital Development will be responsible for promoting risk classification frameworks aligned with international standards and assisting industries in establishing self-regulatory guidelines.

Image source: AI generated by NotebookLM, for reference only. Some text may be blurry, please forgive.

How to manage AI unemployment, AI scams, and personal data?

As AI technology permeates daily life, people’s biggest concerns are about labor rights and new types of crimes. In response, the provisions of the AI Basic Law also address these pain points:

Regarding concerns about AI-induced unemployment, the statutes specify that the government should actively utilize AI to ensure labor rights, eliminate skill gaps, and protect dignified work. For those unemployed due to AI utilization, the government has the responsibility to provide “employment counseling” based on their work abilities.

In managing AI scams, fake content, and deepfake images, the third reading stipulates that the government should prevent AI applications from infringing on people’s lives, property, or national security, and guard against false advertising, misinformation, or forgery.

For AI products or systems identified as “high-risk applications,” the government requires clear labeling of warnings or caution notices, and should establish relief, compensation, or insurance mechanisms to address potential damages.

Regarding personal data collection and privacy, the bill requires the personal data protection authority to assist various ministries in avoiding unnecessary data collection and processing, and to promote privacy protection as a default and design principle in AI systems.

The government should also establish data sharing mechanisms to enhance data usability while maintaining diverse cultural values and intellectual property rights.

Image source: AI generated by NotebookLM, for reference only. Some text may be blurry, please forgive.

What should SMEs prioritize according to the AI Basic Law?

Cai Ming-shun, Dean of Taiwan AI School, further analyzes the impact of the AI Basic Law. He states that regulatory certainty is crucial for industry development, making innovation less of a gamble of “doing first, fixing after problems.”

Article 10 of the AI Basic Law provides real resources for SMEs, giving legal standing to subsidies, tax incentives, and investment rewards; Article 13’s data governance mechanism can establish a de-identified industry data sharing platform, allowing peers to share training data while protecting trade secrets. This will fundamentally change the game.

He suggests that industries should not wait for effect laws from various ministries but should start internal audits of AI applications and conduct risk self-assessments as soon as possible. In the future, every company’s board of directors must have someone who understands both technology and AI regulations, and they should establish cross-company data alliances to collaboratively experiment with technology.

Image source: Cai Ming-shun   Impact of the AI Basic Law on SMEs, what should employers do first?

Legislator responds to the AI Basic Law: hopes Taiwan becomes a model, concerns for children and youth

Regarding the passing of the AI Basic Law, Kuomintang legislator Ge Rujun emphasizes that the essence of AI competition is a competition of values.

He believes Taiwan, with its democratic and free institutional environment and world-class chip technology, should not only play an OEM role but also become a leader in AI legislation. The AI Basic Law is the starting point for Taiwan to learn from the world, and he hopes Taiwan can become a model in the future, solving issues like legal autonomous driving and satellite communication links that are hindered by unclear regulations.

Image source: Facebook of Legislator Ge Rujun

DPP legislator Zhang Yalin, from the perspective of protecting children and youth, believes that the AI Basic Law is not a distant technology law disconnected from daily life. When algorithms lead to addiction, scams, and deepfake images become rampant, children are most at risk of being pushed to the front lines of danger.

She actively advocates for explicitly writing the best interests of children and youth into the law as principles, and calls on the government to immediately launch concrete and enforceable child and youth protection plans after the law’s passage, including risk grading, gender impact assessments, and ethical education at the educational level. She emphasizes that today’s third reading is just the beginning; the subsequent supporting sub-laws are key to ensuring that technology does not leave anyone behind.

Image source: Facebook of Legislator Zhang Yalin

Judicial Reform Foundation criticizes the AI Basic Law: resembles a policy declaration white paper

After the AI Basic Law was passed, the Judicial Reform Foundation (JRF) issued a statement, criticizing that the law lacks the functions of a framework legislation; it reads more like an industry development white paper full of policy declarations.

JRF criticizes that besides vague and non-binding development principles, the current statutes lack clear provisions granting rights to the people, and there is no list of prohibitions against AI abuse by the state.

Image source: Judicial Reform Foundation

JRF calls on the government to legalize within two years the “right to know, decision explanation, and human review,” ensuring that people can request reasonable explanations or human intervention when AI decisions affect credit scores or employment.

Additionally, JRF expresses concern over over-reliance on “industry self-regulation,” which could lead to a jungle law of the strong preying on the weak, concentrating wealth among economically advantaged companies.

JRF emphasizes that the government should refer to international standards, explicitly prohibit the use of AI to establish social scoring systems, predict personal criminal risks, or conduct indiscriminate emotion inference and facial recognition in education and law enforcement contexts.

JRF also urges the Executive Yuan to prioritize legislation that implements a “people-centered” approach, filling gaps in governance frameworks.

Image source: AI generated by NotebookLM, for reference only. Some text may be blurry, please forgive.

The passage of the AI Basic Law is like setting the main beam for Taiwan’s AI development, but the detailed regulations and rights protections inside still need subsequent effect laws and supporting sub-laws to be carefully filled in to truly balance industry development and human rights protection.