You already use AI systems that need a risk tier assigned
Every company deploying AI in Europe must classify each system before the 2 August 2026 general application date. That is not optional. Under Article 6 of the EU AI Act, the risk tier assigned to a system determines which obligations apply to you as a deployer. Get it wrong and you face fines of up to €15 million or 3% of global annual turnover under Article 99.
The good news: for most SMEs with 20-200 employees, the classification step itself is not complicated. Eight questions. One decision tree. Thirty minutes.
This post walks you through exactly that.
Why risk classification comes first
The EU AI Act splits AI systems into four tiers: prohibited, high-risk, limited-risk, and minimal-risk. Your obligations as a deployer scale with that tier. A minimal-risk chatbot on your website needs almost nothing from you. A high-risk CV-screening tool triggers Article 26 obligations including fundamental rights impact assessments, human oversight logs, and staff training records.
Before you can build a compliance programme, you need a verified inventory of what tier each tool sits in. That is the ai risk classification self assessment.
The 8-question decision tree
Work through these questions in order for each AI system your company uses. Stop at the first "yes" that determines a tier.
Question 1 — Is the system on the prohibited list?
Check Article 5 of the AI Act. Prohibited systems include real-time biometric identification in public spaces, social scoring by public authorities, and AI that exploits psychological vulnerabilities to manipulate behaviour. If your system matches any Article 5 description, stop here. You cannot deploy it.
Tier result: Prohibited.
Question 2 — Is it a General Purpose AI (GPAI) model used as a standalone product?
If you are accessing a raw foundation model API and embedding it directly without a layer of your own system design, GPAI rules under Article 51 may apply. Most SMEs use GPAI-powered products built by a vendor, not the raw model itself. If that is your situation, continue to Question 3.
Question 3 — Does it fall under Annex III?
Annex III lists eight areas where AI systems are automatically classified as high-risk. Read each category carefully:
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Biometric identification and categorisation
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Critical infrastructure (energy, water, transport)
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Education and vocational training (e.g. scoring students, admission decisions)
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Employment, workforce management, and access to self-employment (this is the big one for HR teams — CV screening, promotion algorithms, performance monitoring)
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Essential private and public services (creditworthiness, insurance risk)
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Law enforcement
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Migration, asylum, border management
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Administration of justice and democratic processes
If your system makes or substantially influences a decision in any of these categories, answer is yes.
Tier result: High-risk. Move to Question 4 to check for a narrow exemption.
Question 4 — Does the narrow Annex III exemption apply?
Under Article 6(3), a system listed in Annex III is not high-risk if it performs a narrow preparatory task, cannot produce output that directly influences a person-affecting decision, and poses only limited risk to rights or safety. This exemption is genuinely narrow. A tool that ranks job candidates is not exempt simply because a human clicks "approve" at the end.
If the exemption does not clearly apply, keep the high-risk classification.
Question 5 — Does it interact directly with people using text, voice, or generated images?
If yes, Article 50 transparency obligations apply. Users must be told they are interacting with an AI. Deepfakes and AI-generated content must be labelled. This tier is sometimes called "limited-risk" or "transparency-risk" in practice.
Tier result: Limited-risk (transparency obligations).
Question 6 — Is any biometric data processed, even temporarily?
Face recognition for timekeeping, emotion detection in video interviews, or voice-print analysis all trigger both AI Act obligations and AVG/GDPR requirements. Under GDPR Article 9, biometric data is special-category data. A Data Protection Impact Assessment (DPIA) is mandatory. Flag this system for dual-track review.
Question 7 — Does the system generate or process content that could influence public opinion at scale?
For most SMEs the answer is no. But if you run a media company, an edtech platform, or a platform that recommends content to large audiences, re-check Article 50 and any applicable Digital Services Act requirements.
Question 8 — None of the above?
If you have reached Question 8 without triggering another tier, the system is minimal-risk. You have no mandatory obligations under the AI Act, though basic good practice (keeping a record of what you use and why) is still sensible.
Tier result: Minimal-risk.
Filling in your classification register
After running each system through the eight questions, record the result in a simple spreadsheet. Each row should capture:
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System name and vendor
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Primary use case (one sentence)
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Annex III category checked (or "none")
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Risk tier assigned
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Key obligations triggered (e.g. Article 26 human oversight, Article 50 transparency notice, DPIA)
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Date classified and name of person who classified it
This register becomes the backbone of your Article 26 compliance programme. Article 26 of the AI Act requires deployers of high-risk systems to maintain logs, implement human oversight measures, and train relevant staff. Without the register, none of that work has a solid starting point.
Keep the register updated. If you add a new AI tool, run it through the eight questions before go-live, not after.
The three mistakes SMEs make most often
1. Assuming the vendor has classified it for you. Vendors provide conformity assessments for providers, not deployers. Your obligation to classify and document your use of the system sits with you, not them. Read Recital 83 if you need the policy logic behind this split.
2. Classifying once and forgetting. AI systems are updated. A tool that scored minimal-risk last year may have added biometric features this year. Build a review trigger into your annual compliance calendar.
3. Misreading the Annex III "employment" category. This is the most consequential error for HR teams. Any AI that ranks, filters, or recommends candidates, manages shifts, evaluates performance, or monitors productivity falls squarely in Annex III category 4. If your company uses an ATS with AI-powered scoring, a workforce scheduling tool with predictive optimisation, or a performance management platform that surfaces risk flags about employees, those are high-risk systems. They need human oversight protocols, staff training, and a fundamental rights impact assessment before you deploy them at scale.
What comes after classification
Once every system in your stack has a tier, the work splits into tracks:
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Prohibited systems: Immediately cease use or request the vendor to disable the prohibited capability.
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High-risk systems: Build your Article 26 compliance pack. That means use-case documentation, human oversight design, training records, and a fundamental rights impact assessment.
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Limited-risk systems: Draft or update your AI transparency notices. Make sure users can identify AI-generated content.
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Minimal-risk systems: File and move on. Check again if the tool is updated.
Most SMEs find they have one to three high-risk systems, a handful of limited-risk tools, and a longer tail of minimal-risk applications. The classification step usually takes one afternoon. The Article 26 compliance work for each high-risk system takes longer, but having an accurate register keeps it focused.
Start today with one system. Run it through the eight questions. Record the result. That single action is the most useful 30 minutes you will spend on AI Act compliance this year.
Not sure whether your AI tools clear the Annex III threshold? The Khairos AI Comply free 2-minute check maps your current stack against each risk tier and flags the obligations that apply to your situation.