i-law

Commercial and Maritime Law in China and Europe

Chapter 17

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Forward Planning – Regulation of Artificial Intelligence and Maritime Trade

 Jason Chuah1 This chapter, in concluding this very timely book, evaluates the continuing regulatory challenges for maritime trade in the light of rapid technological changes. The scope of the subject is indeed so wide that a single, discrete chapter would not be able to do it proper justice. There is already much ink spilt on the various technological developments to commercial shipping – from the 1990s issues of electronic bills of lading and dematerialisation of shipping documents to the early 2000s when electronic financial solutions were introduced to supply chains, trade financing and warehousing, and then onwards to more recent times, when autonomous shipping and blockchains became the flavour of the month. This chapter chooses to focus on the emerging influence of artificial intelligence (AI) in shipping and international commerce. AI solutions are incrementally designed for use in shipping – an obvious application is in autonomous ships, but in truth, there are far more “disruptive” applications being developed to optimise business processes, voyage and cargo planning and vessel maintenance. The continuing impact of AI on maritime trade is undeniable. Parallel to this technological momentum in the maritime business, governments, including those from the US, EU, UK and PRC, have been quick to respond with proposals for policy and/or regulatory intervention. The emphasis in this chapter is the recently published EU proposal for a Regulation to regulate the use of AI across the European single market, to be called the “EU AI Act”. The rationale for this focus is that whilst many other jurisdictions, such as the US, UK and PRC, have published various position papers and policy statements on regulating AI, none has gone far as the EU in proposing a single all-encompassing legislative instrument.2 The

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proposal is likely to attract much controversy and interest; the consultation and deliberations will be protracted. However, it would be remiss not to consider the potential impact on maritime trade the proposed provisions would produce. In April 2021, the EU Commission tabled a proposal for an EU wide Regulation to provide for a harmonised scheme of governance for AI.3 As a matter of background, the EU Commission had published a White Paper on AI back in February 2020 which set out the policy options on how best to achieve the objective of fostering subscription to AI and that of managing the risks attendant in the use of AI.4 The proposed legislation which was laid as a consequence aims to provide for “a high level of protection of health, safety and fundamental rights” for users and European societies, more broadly.5 However, as expressed by the White Paper, the proposed Regulation also seeks to extend the principle of free movement to AI goods and services. Member States are explicitly prohibited from imposing unsanctioned restrictions on the development, marketing and use of AI systems.6

I Definitions

An important plank in any regulatory scheme is establishing the definitional parameters. As far as the EU is concerned, a formalised definition is provided for in the draft Regulation. Article 3(1) defines AI as

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