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Keeping your dawn raid guidance current
Unannounced inspections or ‘dawn raids’ are used by antitrust authorities to obtain evidence when there are suspicions that individuals or businesses have infringed the antitrust rules.
Canada | Publication | October 31, 2023
On October 5, the Minister of Innovation, Science and Industry (ISED) wrote a letter to the Standing Committee on Industry and Technology proposing amendments to Artificial Intelligence and Data Act (AIDA), which was introduced as part of Bill C-27 in June 2022. Further information on AIDA can be found in our previous update.
The letter suggests amendments in the following areas:
The voluntary Code of Conduct published by ISED covers the first two areas as set out in our previous update. Accordingly, this update will focus on the last three areas.
Proposed section 71 of AIDA requires assessing an AI system to determine whether it is a “high-impact system.” This assessment of “high-impact system” is important as it is the threshold that triggers most obligations (i.e., obligations of assessing, mitigating and monitoring risk, keeping records, publishing description of AI systems in use, and providing notice of harm). However, AIDA does not define “high-impact system” creating further uncertainty as to which AI systems would actually be subject to these obligations.
In this letter, ISED does not suggest a definition of “high-impact systems” but instead proposes seven classes to determine whether a system is high impact or not. These classes are:
The letter also states that this list can evolve and be modified by the Governor-in-Council as technology changes. If these amendments are adopted, then they would replace the proposed requirement for high-impact system assessments of section 72 of AIDA.
ISED has recommended that AIDA align with international frameworks such as the EU AI Act as well as the OECD AI Principles. ISED encourages adopting OECD’s definition of “artificial intelligence,” which is:
“a technological system that, using a model, makes inferences in order to generate output, including predictions, recommendations or decisions.”
ISED has also recommended that sections of AIDA imposing risk mitigation measures (e.g. section 8 requiring measures to identify, assess and mitigate the risks of harm or biased output, or section 9 requiring monitoring compliance with the mitigation measures) be replaced with new sections that better clarify responsibilities for organizations developing, managing and putting into service high-impact systems.
These responsibilities have also been defined in the voluntary Code of Conduct. However, a new category of entity has been mentioned in the letter – “persons placing on the market or putting into service a high-impact system.” It remains to be seen what responsibilities will be placed on such players.
The letter also states any organization that “substantially modifies” a high-impact system will be responsible for ensuring that pre-deployment requirements are met. “Substantially modifies” has not been defined in the letter.
The letter further sets out that organizations that conduct “regulated activities”3 (a defined term in AIDA) must prepare an accountability framework that the commissioner can request at any time. The framework will entail:
The letter also stated that ISED will support amendments that will further enhance and clarify AIDC’s role and powers.
ISED’s proposed amendments attempt to bring clarity and enhancement to AIDA. Organizations should prepare for the upcoming legislation by setting up a process to capture the different ways in which their organizations might be designing, developing or making available for use an AI system. Organizations should lean on previously existing vendor risk management or security postures already developed. In parallel, organizations can also create an accountability framework that can guide the development of an AI compliance program.
Section 7: A person who is responsible for an artificial intelligence system must, in accordance with the regulations, assess whether it is a high-impact system.
Regulated activity means any of the following activities carried out in the course of international or interprovincial trade and commerce: (a) processing or making available for use any data relating to human activities for the purpose of designing, developing or using an artificial intelligence system; (b) designing, developing or making available for use an artificial intelligence system or managing its operations.
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Unannounced inspections or ‘dawn raids’ are used by antitrust authorities to obtain evidence when there are suspicions that individuals or businesses have infringed the antitrust rules.
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The EU Foreign Subsidies Regulation, or FSR, is intended to prevent or remedy distortions of the EU internal market caused by “foreign” – meaning non-EU – subsidies benefitting companies active in the EU.
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The English High Court has given its judgment in the legal battle between FW Aviation (FWA) and VietJet Aviation Joint Stock Company (VietJet). This case revolved around the enforcement of leasing agreements for four Airbus aircraft and the alleged interference by VietJet in the aircraft’s repossession in Vietnam.
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