This is a working note for SaaS engineering teams shipping LLM features into the EU. Originally posted on disclos.eu. Skip the Brussels theatre. Here is what the regulation says, what enforces when, and what you do about it before 2 August 2026.
The EU AI Act starts applying to companies that ship AI features into the EU on 2 August 2026. Most SaaS founders we talk to assume it's somebody else's problem. It isn't. If your product talks to users in the EU, generates synthetic content, or does anything in HR, education, finance, or biometrics, the obligations land on you. The model providers you build on dealt with theirs back in August 2025.
The penalty framework lands on the same date. The cap for prohibited practices is €35M or 7% of global turnover. High-risk obligations cap at €15M or 3%. Supplying incorrect information costs €7.5M or 1%. The SME ceiling takes the lower of the two figures, but a missed Article 50 disclosure at Series A is still runway-level money.
What enforces on 2 August 2026
The Act applies in waves. Three dates worth knowing.
The first was 2 February 2025. That's when Article 5 prohibited practices started applying. Social scoring, real-time biometric ID in public spaces, manipulative AI, emotion recognition in workplaces and schools. If you do any of these, your company is already non-compliant.
Next came 2 August 2025. That's when GPAI model providers like OpenAI, Anthropic, Google, Meta and Mistral started carrying Articles 51 through 55. This wave is upstream from your SaaS.
The wave that matters for you is 2 August 2026. That's when the rest of the Act applies. Article 50 transparency rules, the high-risk regime in Chapter III, the penalty framework, AI Office enforcement powers. If you ship an LLM feature and you have EU users on that date, this is the wave that hits.
The four-question triage
Before you spend a single hour on conformance work, sit through this triage. The answers determine which articles touch your product and how much work you owe.
Question one: are you a Provider, a Deployer, or both? A Provider places an AI system on the market under its own name. A Deployer uses one. If you wrap GPT-4 in your SaaS and sell it under your brand, you're the Provider of the resulting AI system and a Deployer of the underlying GPAI model. Most SaaS sit in the overlap.
Question two: does Annex III touch your product? Annex III lists the high-risk use cases. The categories that hit SaaS most often are biometric identification or categorization, critical infrastructure (energy, water, transport), education and vocational training (admissions scoring, plagiarism detection, exam proctoring), employment and HR (CV screening, performance evaluation, monitoring), access to essential services (credit scoring, insurance pricing, emergency dispatch), law enforcement use cases, migration, asylum, border control, and administration of justice and democratic processes.
If your SaaS does CV screening, credit scoring, automated grading, or exam proctoring, you're high-risk. Chapter III applies to you. The documentation lift runs to several hundred engineering and compliance hours per system. Plan for it now. If your SaaS does none of the eight, you're not high-risk. Your main exposure is Article 50.
Question three: do you fine-tune or substantially modify a foundation model? If yes, you may inherit GPAI Provider obligations under Article 25. The threshold of substantial modification is unsettled. The GPAI Code of Practice consultation closed in March 2026 without a clean answer. If you fine-tune anything beyond prompt engineering, budget for a written legal opinion before 2 August.
Question four: do any of your AI features touch Article 5 prohibited practices? Run through the Article 5 list once. Most SaaS won't trigger any of them. Workplace emotion recognition is the one that catches teams out. If you analyse employee sentiment from emails or call recordings, this is you.
Article 50, which is the part that hits everyone
Article 50 is the obligation every SaaS shipping AI to EU users carries on 2 August 2026, regardless of high-risk status. It has four sub-rules.
50(1) covers AI systems that interact with users. You have to tell them they're talking to AI, unless context makes it obvious.
50(2) covers synthetic text, image, audio or video output. You have to mark it as AI-generated in a machine-readable way. The expected standard is C2PA. European standardisation bodies haven't finalised the implementation detail yet.
50(3) covers emotion recognition and biometric categorization. You have to inform users that it applies.
50(4) covers deepfakes. You have to disclose the content as artificially generated.
The practical translation for a typical SaaS is short. One visible disclosure on first chatbot interaction. An AI-generated badge or metadata flag on every output your tool produces. A privacy notice paragraph covering inference, training data sources, and retention. Engineering effort is small. The bottleneck is knowing what to write.
The 7-step self-audit you can run this week
These seven steps work for most non-high-risk SaaS in two to three weeks of focused work. Annex III teams need longer and outside review.
Inventory every AI feature in your product. Chatbot, embedding search, recommendations, autocomplete, summarisation, voice. Include every internal tool too. You can't audit what you haven't listed.
Tag each feature with a role. Provider, Deployer, or both. Write it down per feature.
Run each feature through Annex III. Yes or no per category. Any yes flags the feature for the high-risk regime.
Run each feature through Article 5. Yes or no per prohibition. Rare hits, but check.
Map each remaining feature to Article 50. Which sub-rule applies. Note the disclosure you owe.
Document the model supply chain. Who provides each foundation model. Whether you fine-tune. Whether you log inputs and outputs. Article 25 inheritance rests on this trail.
Write or update three documents. A public AI-use disclosure on your site. An internal AI policy for your team. An incident-response stub for Article 73 reporting if you're high-risk.
When to bring in outside help
There are three triggers for outside help.
If you sit on Annex III and you've never built compliance documentation before.
If procurement at one of your enterprise customers has asked for an AI Act attestation in writing.
If you fine-tune a foundation model and need an Article 25 opinion.
Outside those three cases, the work is doable in-house. The Act is long, but the obligations for a non-high-risk SaaS are bounded.
Where Disclos fits
We run a fixed-scope audit for SaaS. €997 one-time, 5 business days, a written report against every relevant article of Regulation 2024/1689. Refund if your SaaS isn't compliant by 2 August 2026 after following the report. Details at disclos.eu.
If you only want this checklist as a one-page PDF, email gatis@disclos.eu and we'll send it back the same day.
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