Latin America’s AI Regulation: Balancing Innovation and Risk in Brazil, Mexico, Chile & Argentina
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Artificial Intelligence has become a focal point of discussion worldwide, with governments striving to balance the growth of this transformative technology against the risks it poses. Latin America, a region recognizing AI's potential for economic and social development, is gradually shaping its regulatory landscape, influenced by global standards like the EU AI Act. In this detailed report, we examine the approaches of four key countries—Brazil, Mexico, Chile, and Argentina—as they navigate the complexities of AI governance.
[Read More: Understanding the Risk Classification of the EU's AI Act]
AI’s Economic Potential in Latin America
AI is forecasted to contribute significantly to Latin America's GDP, with estimates from The Economist suggesting a 5.4% gain—amounting to $0.5 trillion—by 2030. Governments across the region view AI as a catalyst for innovation and growth while grappling with concerns about human rights, fairness, and transparency. The EU AI Act, which came into effect in August 2024, has been particularly influential in shaping discussions on risk-based AI regulation in Latin America.
[Read More: EU Becomes the First Country to Enact Comprehensive AI Law!]
Brazil: A Proactive Framework
Brazil stands out as the most advanced Latin American country in AI regulation, with Bill No. 2,338/2023 under active discussion in the Senate. This comprehensive bill seeks to safeguard fundamental rights, foster technological development, and align with democratic principles.
Key Features of Brazil's AI Bill:
Risk-Based Approach: Inspired by the EU AI Act, the bill prohibits AI systems deemed excessively risky while imposing strict requirements for high-risk applications, including transparency and fairness obligations.
Public Sector Oversight: Special provisions ensure responsible AI use in public services.
Impact Reporting: Developers of high-risk AI must prepare public impact assessments, updated throughout the AI system's lifecycle.
Innovative Additions: Unique provisions include energy efficiency requirements, copyright protection in generative AI, and mandatory disclosure of AI-generated content.
Regulatory Sandbox: A controlled environment for AI experimentation promotes innovation.
Enforcement Mechanism: The AI National Regulation and Governance System, led by the Brazilian Data Protection Authority, oversees compliance and imposes sanctions.
Brazil’s approach demonstrates a balanced commitment to fostering innovation while addressing AI's societal risks.
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Mexico: Slow Progress, Cautious Approach
Mexico has yet to establish dedicated AI regulations, with its progress trailing behind other Latin American countries. While the country actively participates in international discussions, AI-specific laws remain in development.
Highlights of Mexico's AI Framework:
Limited Legislation: Most bills, including one introduced in April 2024, focus on specific aspects like prohibiting deep fakes.
Comprehensive Proposals: The April 2024 bill adopts a risk-based classification system and emphasizes human rights protection but imposes stringent requirements, such as mandatory regulatory approvals for all AI systems.
Challenges: Despite Mexico’s growing role in the tech sector, AI regulation is not a priority under the current administration.
Mexico’s cautious stance reflects its deliberate effort to ensure regulatory effectiveness, though progress remains limited.
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Chile: A Regional Leader
Chile has emerged as a leader in AI governance within Latin America, with its government submitting a comprehensive AI regulation bill to Congress earlier this year.
Chile’s AI Bill at a Glance:
Risk Classification: AI systems are categorized into four levels: unacceptable, high, limited, and no risk. Unacceptable systems, such as those involving social scoring, are outright banned.
Focus on Transparency: Limited and high-risk systems must adhere to transparency and data governance rules.
Unique Approach: Unlike the EU AI Act's certification process, Chile's bill requires stakeholders to classify their AI systems based on risk.
International Alignment: The bill aligns with United Nations Educational, Scientific and Cultural Organization (UNESCO) and Organisation for Economic Co-operation and Development (OECD) guidelines, ensuring compatibility with global standards.
Chile's proactive measures position it as a model for balancing innovation with human rights protection.
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Argentina: Ambitions to Become an AI Hub
Argentina is pursuing a dual strategy of establishing regulatory frameworks while positioning itself as an AI-friendly innovation hub. Legislative efforts began in 2023, with multiple bills under consideration in the Senate.
Key Elements of Argentina’s AI Proposals:
Risk-Based Framework: Inspired by the EU AI Act, the bills classify AI systems into levels of limited, minimal, high, and unacceptable risk.
National Registry: Proposed legislation requires all AI systems to be registered and undergo impact assessments.
Ethical Guidelines: Non-binding directives promote transparency, accountability, and human oversight.
Attracting Investment: President Javier Milei supports creating a lenient regulatory ecosystem to attract global tech companies.
Argentina’s approach underscores its ambition to be a regional AI hub while addressing ethical concerns.
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A Shared Vision for AI Governance
Latin America's largest jurisdictions are converging on a risk-based regulatory approach, drawing lessons from the EU AI Act. Common objectives include:
Prohibiting high-risk AI applications incompatible with human rights.
Mandating transparency and oversight for high-risk technologies.
Encouraging innovation through controlled regulatory environments.
The diversity in progress and priorities reflects each country's unique economic and political context, with Brazil and Chile leading the way, Mexico adopting a measured stance, and Argentina leveraging its regulatory flexibility for growth.
[Read More: UK Advances AI Governance: New Laws, Innovation Office, and Quantum Centre Unveiled]
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Source: White & Case, Reuters, Dial Zara, Tech Policy
