Valruzia

[Aethan]

Valruzia announces AI Sovereignty Laws in sweeping digital overhaul

Government plans domestic-only AI requirement, strict algorithmic transparency rules and creation of a national audit authority

April 5695

---

The recently reappointed Valruzian government – a second-term coalition between Krystian Barela's Sovereign Valruzia and Fryderyk Konik's Forward Valruzia approved the month after the election – is preparing the most ambitious artificial-intelligence regulation in the nation’s history, a project that the reelected Chancellor Krystian Barela has described as “an important step towards securing our technological future for the new century”. Government officials confirm that his administration will introduce a comprehensive set of laws meant to redefine how AI is developed, deployed, used and supervised across the country.

The recently created Ministry of Technology and Innovation – the first time the Valruzian government implements a new ministry since the Ministry of Food Sovereignty under the second Nowik government – has confirmed that the law will be brought to the Sejm before the end of the summer session, and as the new government commands an absolute majority it is expected to pass without major problems.

At the heart of the package lies the distinctive mark of Sovereign Valruzia as once again, it features a stark autonomy from the rest of the global world, this time in the field of digitalization. Barela's government intends to require that the most influential and high-risk AI systems operating in Valruzia be entirely developed, trained and hosted within national borders. Foreign systems will not be banned overnight, but they will face a three-year transition period during which companies are expected to relocalize their infrastructure or exit the market. Barela’s team argues that this policy is essential to prevent strategic dependency on foreign firms whose models may be influenced by non-democratic governments or by commercial practices that disregard Valruzian data protection standards, or risking the influence of foreign agents on Valruzian soil. Some critics warn that such an approach risks isolating local researchers from global innovation yet Helena Mistal, the first minister of Technology, insist that the long-term benefits of a sovereign digital ecosystem "greatly outweigh the costs".

The government intends to reshape how AI interacts with workers by introducing one of the strictest labor-protection mechanisms in the world regarding the use of AI. For this purpose, companies that plan to automate tasks previously carried out by humans will be required to demonstrate that no worker is being displaced without a credible retraining or relocation plan, and will be obliged to offer financial compensation and professional support whenever automation is justified on economic grounds. A new public institution, the Defender of the Automated Worker – dependant on the Ministry of Labor -, will be empowered to investigate suspicious cases, audit companies that replace labor with algorithms and block deployments considered harmful to employment stability. Barela has justified this approach as the only way to ensure that technological progress “never comes at the price of human dignity”.

The public sector will undergo similarly transformative changes. The government plans to ban fully automated decision-making in sensitive domains such as welfare allocation, judicial evaluation, medical diagnosis, public-housing assignment or the granting of administrative benefits. With the approval of the new law, AI may be used only as an assistive tool and always under mandatory human supervision, and every deployment within state institutions will have to be publicly registered, including clear explanations of the model used, the data it handles and the purpose it serves. This transparency, the administration argues, will protect citizens from opaque algorithms having an influence in their lives without facing proper accountability.

As pointed by the draft of the new law, data protection is set to become more stringent than ever, as the legislation will prohibit the training of AI systems on sensitive data such as biometric markers, religious affiliation, ethnicity or sexual orientation unless explicit consent is provided. Surveillance tools using facial-recognition technologies will require a judicial order, putting an end to mass surveillance practices increasingly adopted in other countries, and all AI providers will have to document the origin of their datasets, the risks they entail and the mechanisms used to mitigate potential harm, producing annual risk reports that will be made accessible to regulators.

To provide a common standard for national development, the government plans to introduce a new certification label, “AI Made in Valruzia”, and models that qualify will benefit from tax incentives, preferential treatment in public procurement and recognition as compliant with the country’s strict transparency and safety provisions. This move is expected to strengthen domestic industry and help smaller companies compete with major foreign developers, as well as to calm the strongest criticism of the new law from various sectors.

The third pillar of the reform project is more institutional than technical but not less important, according to the government. The Barela administration plans to create a new national authority with the power to inspect, verify and, when necessary, suspend the use of unsafe or discriminatory models. This body – provisionally named "National AI Audit Authority" ("Krajowy Organ Kontroli Sztucznej Inteligencji", or KOKSI) – will function as the country’s central guardian of digital standards, and its inspectors will be granted the authority to enter companies and public agencies, examine training datasets and verify that systems comply with Valruzian law. The government argues that without a strong enforcement structure, even the most sophisticated legal framework would remain a mere declaration of intent. Alongside KOKSI, a new National Ethical Council for AI will be created, formed by academics, labor union leaders, business associations and senior officials, with the task to issue recommendations, assess social risks and advise the government on potential moratoria when societal impacts remain unclear.

The economic dimension of the reform is no less significant. Companies that significantly increase their profits through AI-driven productivity will be subject to a new “algorithmic productivity tax”, the revenue of which will be channelled into retraining programmes, industrial transition funds and digitalisation support for small and medium Valruzian enterprises.

Speaking to the Sejm to present the first draft of the AI regulation proposal, Chancellor Barela said that this law was something "long due", and that Valruzia "shall never depend on foreign agents or technology".

"Honorable Marshall of the Sejm, esteemed deputies and citizens of Valruzia alike,

Today we live in an era in which the tools we create, the algorithms we design and the systems we delegate decisions to will shape our lives as surely as any law passed in this chamber. Technology is no longer a distant horizon, it is the space in which we work, learn, love, trade, argue and dream. It is our present, and therefore, it must also be bound by our values.

For a long time, perhaps too long, Valruzia has depended on foreign technologies whose inner workings we could not inspect and whose decisions we could not fully understand or control. This dependency has placed our economy, our data and ultimately our democracy at risk. Today, I propose we choose another path, a path built under our concepts of sovereignty, responsibility, transparency and accountability. 

The legislation I present to you seeks to ensure that the most impactful AI systems used in our country are developed here, under our supervision, following our laws and serving our people, rather than the interests of distant corporations or foreign states. I believe it is the right of a free nation to define the digital foundations on which its future will rest.

But technology must also respect human dignity, and every citizen has the right to understand how and why an automated system reaches a conclusion that could affect their job, their home or the services they receive. No algorithm has the right to discriminate against a Valruzian, regardless of who they are or where they come from. In a democracy and in the current modern world, decisions may be automated, but accountability is still a pillar of our democracy.

This is why our proposal includes clear guarantees: the right to explanation, the right to challenge, the right to human oversight. And it is why we establish an independent authority empowered to ensure that these rights are not merely written into law but lived in practice.

To those who fear that regulation will topple innovation in our country, let me say this to you: there is no lasting innovation without trust. There is no progress when people feel powerless before systems they cannot question. A strong, sovereign and transparent AI framework will not slow our technological development. I'm pretty confident that it will rather anchor it.

Deputies, the choice before us is simple. We can allow others to define the digital conditions of our new century that it's about to start, or we can assert our responsibility to shape them ourselves. I believe Valruzia has the talent, the courage and the vision to lead. And with this legislation, we place the first stone.

Thank you."

Labor unions have welcomed the new law, but have expressed scepticism about its future enforcement under right-wing governments. In addition, the Communist Party of Valruzia has announced that it will table amendments to the law but that, in principle and if they are approved and incorporated into the future law, it will vote in favour of it, in what some internal sources describe as "an important point in its favor", as it has the support of the party which, according to various polls, has the strongest support among lower-class workers.