Iceland's government AI working group has delivered a report with 69 proposals, and cabinet has approved a steering group of ministries

Key takeaways

• The report is a set of 69 proposals on ten policy areas. It is not law.
• Cabinet approved one proposal at once, a steering group of ministries on AI. The release gives no membership or start date.
• The report says a decision on incorporating the AI Act into the EEA Agreement had not been made.
• The culture ministry is preparing an updated AI and language-technology action plan, targeted for the end of 2026.

What did the Icelandic working group deliver, and is it binding?

It delivered a report of proposals, not a law. The release says the group, appointed in July on the proposal of the Prime Minister and the culture, innovation and higher education minister, was asked to make an overall assessment of the Government's AI policy and actions and to propose priorities and improvements. The report says it was appointed on 1 July 2026 with five experts from outside the Government Offices and three months to work.

The release states: "Alls leggur starfshópurinn fram 69 tillögur á tíu málefnasviðum" (in all, the working group puts forward 69 proposals across ten policy areas). It names three priorities: skills for everyone, AI in Icelandic on Icelandic terms, and targeted adoption in the public sector. The report was presented to the Prime Minister, the culture minister and the finance minister on the Tuesday before the release and discussed at the cabinet meeting on the morning of 9 October 2026.

Nothing in the release or the report gives the proposals legal force. The report describes its own first steps as decisions that can be taken before the end of 2026, and says: "Engin þeirra kallar á lagabreytingu." (none of them requires a change in law). That is the report's statement about its first-step list, not about all 69 proposals.

What did cabinet approve, and what is the steering group?

Cabinet approved one proposal at once. The culture, innovation and higher education minister, Logi Einarsson, is quoted in the release saying one of the working group's proposals provides for a steering group of ministries on AI, to coordinate action and underline the importance of the field, and that cabinet approved it that morning. The release does not state the group's membership, mandate text, chair or start date.

The report's institutional chapter has a proposal that appears to be this body. In the desk's reading, proposal S2 is the one the release means, though the release does not cite a proposal number. S2 says: "Stýrihópur allra ráðuneyta, undir forystu forsætisráðuneytisins og með fulltrúa frá hverju þeirra, verði vinnuarmur ráðherranefndarinnar" (a steering group of all ministries, led by the Prime Minister's Office with a representative from each, would be the working arm of the ministerial committee). It adds that the group would be a standing forum for implementing EEA acts in the digital field. Proposal S1 would also create a ministerial committee on AI under the Prime Minister. The release does not say that committee was approved.

What does the report propose on regulation and the EU AI Act?

The report's regulation chapter (chapter 8, proposals V8.1 to V8.5) is the part most relevant to counsel. Its summary says European rules will largely decide the framework for AI in Iceland, while Iceland has a good deal of say over preparation, implementation, supervision and interpretation.

• V8.1 would have Iceland implement EEA rules quickly and clearly and "without gold-plating", starting preparation before acts formally enter through the EEA Agreement.
• V8.2 would have the ministries explain upcoming rules, naming the AI Act (2024/1689) and the AI Omnibus (2026/1744), through an official information page with a timeline.
• V8.3 would clarify the responsibilities of existing supervisory bodies and coordinate their interpretation. It says: "Ekki ætti að þurfa nýja stofnun" (a new body should not be needed), and it leaves to the steering group where coordination would sit.
• V8.4 proposes that beneficial features, such as labelling of government content and transparency about training data, could be applied earlier in government practice and procurement.
• V8.5 would rely on Nordic and European cooperation, including the option of running a regulatory sandbox jointly with other states, which the report notes each state may do.

On status, the report says the AI Act has been assessed as EEA-relevant and is under examination by the EEA EFTA states, and: "ákvörðun um upptöku í EES-samninginn liggur ekki fyrir" (a decision on incorporation into the EEA Agreement has not been made). It says Icelandic authorities are preparing implementation and a bill is intended once the regulation has been incorporated. These are the report's statements as of its publication in October 2026.

What else is in the 69 proposals?

The release lists ten policy areas: institutional arrangements and the social effects of AI, plus eight subject areas. The eight are education and skills; data; Icelandic, language technology and Icelandic language models; intellectual property; computing power, data centres and energy; AI sovereignty; use in the public sector; and regulation and the legal framework.

Two examples from the report show how the proposals read. Proposal V4.1 would have the culture ministry assess payment routes to rights holders for AI use, alongside a copyright bill that implements the EU copyright directive (DSM), and says extended collective licensing and a levy should be considered. Proposal T5 would have the Government ensure, before the next elections, that it is clear how campaign rules apply to AI content, including labelling and deepfakes of candidates. Both are proposals only. We did not review the other proposals line by line.

What should policy counsel and AI vendors do now?

Treat the report as a signal of direction, not as a compliance requirement. The release says the two ministries will review the proposals and that cross-cutting work calls for active consultation among all ministries.

• Watch for the updated AI and language-technology action plan that the release says is targeted for the end of 2026.
• Watch for the EEA decision on incorporating the AI Act, which the report says had not been made, and for the bill the report says would follow incorporation.
• If you sell to Icelandic public bodies, note that V8.4 and the report's procurement proposals would have the State set requirements as a buyer. Check any later tender terms rather than assume them.
• Keep a record of which proposals later become law, regulation or tender terms, and which stay as proposals.

What are the key dates and parties?

What we did not verify

What we opened: the Government of Iceland news release of 9 October 2026 and the full report PDF, Gervigreind til góðs, on 2026-10-25. We read the institutional chapter (S1, S2), the regulation chapter (V8.1 to V8.5), the passages for proposals V4.1 and T5 that we describe above, the first-steps pages and the proposal index statement that the proposals number 69.

What we did not open: the other chapters in detail, so we say nothing about proposals outside S1, S2, T5, V4.1 and V8.1 to V8.5 beyond what the release states. We did not open any cabinet minute or decision text, the EEA Joint Committee record, or the Icelandic ministries' pages on the AI Act. The English instrument name is our rendering of the Icelandic title, and the quotations from Icelandic are given with our English paraphrase in brackets.

What we refuse to claim: that any proposal other than the steering group has been adopted, that the steering group is the report's proposal S2 (we give that as our reading), that Iceland has incorporated or will incorporate the AI Act on any date, or that the report creates any duty for vendors.

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