Integration of Satellite Intelligence and AI in Strike Operations

17.11.2025

The integration of satellite intelligence and AI is no longer science fiction; it is a rapidly growing commercial and defense reality. For foreign technology companies, AI developers, and defense contractors, this creates a complex legal minefield when operating in or selling to the European Union. This article provides clear answers on the major risks you face, from the EU AI Act to export controls and product liability.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "JUDr. Jakub Dohnal, Ph.D., LL.M.", an expert on the subject.

What Does "AI-Driven Strike Capability" Mean for Your Business?

The term "strike operations" evokes military action, but the underlying technology—AI-powered analysis of satellite data—is inherently dual-use. Your company may not be building weapons, but you might be developing or using the core components.

This technology is used commercially for:

Disaster Management: Analyzing satellite imagery to map flood damage or predict wildfire paths in real-time.
Critical Infrastructure Protection: Using AI to monitor pipelines or energy grids for threats and anomalies.
Cybersecurity: Fusing data to manage and respond to large-scale cyber-attacks on infrastructure.

The legal problem is that the software for "disaster response" is often functionally identical to software for military analysis. This technology, known as Geospatial Intelligence (GEOINT) or Signals Intelligence (SIGINT), automatically triggers a web of overlapping and severe EU regulations.

Our lawyers are ready to assist you in classifying your technology under EU law. Email us at office@arws.cz.

The EU vs. US Regulatory Divide: A Core Challenge

A primary challenge for foreign firms is the deep philosophical split between EU and US regulation.

The US generally favors a market-driven, innovation-focused approach, relying on existing laws and private sector leadership.

The EU, in contrast, has built a strict, binding legal framework that prioritizes fundamental rights and safety. This framework applies to any company placing products on the EU market, regardless of where your headquarters are located.

Are You Caught in the EU AI Act Compliance Trap?

The new EU AI Act is the centerpiece of this regulation. It classifies AI systems based on their potential for harm.

Many systems using satellite data for analysis fall into the "high-risk" category, particularly if they are used for:

Managing and operating critical infrastructure.
Biometric identification or "pattern-of-life" analysis from high-resolution imagery.

A common mistake is relying on the AI Act's "military exception". The law states this exception applies only to systems developed or used "exclusively" for military purposes. If your AI model is dual-use—even if just for disaster response—the exception fails, and you are fully subject to the Act's severe penalties.

The EU AI Act

Risks and penalties	How ARROWS helps
Misclassifying your dual-use AI as "military only" and failing to comply with high-risk rules. Fines up to €35 million or 7% of global annual turnover.	Legal Opinions & Compliance Audits: We provide a definitive legal opinion on your AI's classification to prevent catastrophic fines. Need an AI Act audit? Contact us at office@arws.cz.
Failing to meet high-risk requirements (e.g., data governance, risk management systems, activity logging). Fines up to €15 million or 3% of global annual turnover.	Drafting Legally Required Documentation: ARROWS will prepare all internal policies and technical documentation required by the EU AI Act. Get tailored legal solutions by writing to office@arws.cz.
Providing incorrect or misleading information to EU national authorities during an inspection. Fines up to €7.5 million or 1% of global annual turnover.	Representation Before Public Authorities: We represent you during all interactions with regulators to ensure your compliance is properly demonstrated. For immediate assistance, write to us at office@arws.cz.

FAQ – Legal tips about AI Regulation in the EU

1. Does the EU AI Act apply to my US-based company?

Yes. The Act has extraterritorial reach. If you place an AI system on the market in the EU, or if its output is used in the EU, you must comply. If you sell to the EU, contact us at office@arws.cz.

2. What makes an AI system "high-risk"?

Systems are generally high-risk if their failure poses a threat to health, safety, or fundamental rights. This includes AI for critical infrastructure (energy, transport), biometric identification, and law enforcement. Our lawyers can assess your system; write to office@arws.cz.

3. When do these new AI Act rules take effect?

The Act is in force, but the rules are phased. The obligations for high-risk AI systems (the most common category for this topic) become fully applicable in August 2026. Do not hesitate to contact our firm for a compliance plan – office@arws.cz.

When the AI Gets it Wrong: Who is Liable?

Imagine your AI misidentifies a location from satellite data, leading to a flawed disaster response and massive property damage. Who pays? The EU and US have starkly different answers.

In the US: A claimant must typically prove your negligence under traditional tort law. This is incredibly difficult dueD to the "black box" problem—it's almost impossible for a plaintiff to prove why a complex AI made a specific error.

In the EU: The legal landscape just shifted dramatically against tech companies. The EU's new Product Liability Directive (PLD), which replaces a 40-year-old law, brings revolutionary changes:

1. Software Is Now a "Product": The PLD explicitly defines software, including AI systems, as a "product" subject to no-fault, strict liability.

2. Burden of Proof Is Eased: Claimants are given powerful new tools. If a claimant faces "excessive difficulties" due to technical complexity (which AI always is), a court can presume the product was defective.

3. Disclosure of Evidence: Courts can now order you to disclose technical documentation and training data to the claimant.

This change is critical. The EU's original plan for a separate AI Liability Directive (AILD) was withdrawn because these powerful, claimant-friendly rules were merged directly into the new PLD.

ARROWS provides urgent legal consultations and contract reviews to update your terms of service and supply chain agreements to reflect this new, stricter liability. Protect your company by writing to office@arws.cz.

The Data Dilemma: Training AI and Protecting Your IP

Data is the fuel for AI, and here, the legal differences between the EU and US are explosive for your business model.

Copyright (Training Data):

In the US: Companies train AI on copyrighted data, claiming a "fair use" defense. This is currently being tested in high-stakes lawsuits.
In the EU: There is no broad "fair use" defense. The EU uses a Text and Data Mining (TDM) exception. This exception allows data mining only if the copyright holder has not explicitly "opted-out". If you train your AI on opted-out data in the EU, you are infringing copyright.

Database Rights (Your Business Model):

Many geospatial companies build their entire business model on the sui generis (special) database right—an EU-specific protection for substantial investment in a database.

The new EU Data Act (applicable from September 2025) creates an existential threat. Article 43 (formerly 35) of the Act removes this sui generis protection for any database containing data generated by a "connected product".

And yes, a satellite is explicitly considered a "connected product" as the definition includes devices that communicate via "satellite-based networks". This new law is designed to unlock data, potentially destroying the exclusivity of your data-heavy business model.

Privacy (Data Collection):

In the US: Privacy laws are sectoral and vary by state. They often exclude "publicly available information".
In the EU: GDPR applies. As satellite resolution increases, your imagery can capture identifiable data (faces, license plates, property details). This is "personal data," and processing it without a legal basis is a severe GDPR violation.

Data, IP, and Privacy

Risks and penalties	How ARROWS helps
Losing exclusive database rights for your satellite data catalogue under the new EU Data Act. Competitors may gain access to your most valuable data.	Legal Opinions on IP Strategy: We analyze your business model and draft new service and licensing contracts to protect your data value. Want to protect your data? Email us at office@arws.cz.
Violating GDPR by processing high-resolution satellite imagery that incidentally captures personal data. Fines up to €20 million or 4% of global annual turnover.	GDPR Compliance Audits: We draft internal policies and Data Protection Impact Assessments (DPIAs) for processing geospatial data. Need a GDPR check-up? Contact us at office@arws.cz.
Illegally training your AI on EU data where the copyright holder has "opted-out" under the TDM exception. Copyright infringement lawsuits and orders to destroy your model.	Drafting Legally Required Documentation: We prepare your AI training data policies to ensure compliance with EU copyright law. Need legal help with training data? Write to office@arws.cz.

The Export Control Barrier: Dual-Use, EAR, and ITAR

For any company in the defense and tech space, navigating export controls is a primary business function. This is a critical area of legal difference.

The EU: Operates under Regulation (EU) 2021/821, controlling "dual-use" items.
The US: Operates under the much stricter and extraterritorial EAR (Export Administration Regulations) and ITAR (International Traffic in Arms Regulations).

The US has unilaterally controlled AI software for geospatial analysis under ECCN 0D521 and is pushing for its inclusion in the multilateral Wassenaar Arrangement.

This creates a compliance nightmare. If your foreign company operates from the Czech Republic (an international law firm operating from Prague, European Union), you are subject to EU rules. But if your technology incorporates any US-origin software, components, or data, you are also subject to US EAR/ITAR rules.

Navigating this conflict is essential for your supply chain and international sales. The ARROWS International network, built over 10 years and active in 90 countries, specializes in securing licenses and regulatory approvals for dual-use technology. Need help with export controls? Contact us at office@arws.cz.

The Final Frontier: International Humanitarian Law (IHL)

Finally, for technology used in actual "strike operations," International Humanitarian Law (IHL) applies. The global debate is focused on Lethal Autonomous Weapons Systems (LAWS)—machines that can select and engage targets without human intervention.

The key legal and ethical standard emerging from the UN and IHL is the need for "meaningful human control". Tech companies supplying defense clients must be prepared to provide legal and technical proof that their systems are not fully autonomous.

ARROWS provides legal opinions on IHL compliance for technology intended for the defense sector. Ensure your technology is compliant by writing to office@arws.cz.

Your Strategic Legal Partner in Prague, European Union

The integration of AI and satellite data is not one legal field; it is a complex convergence of AI regulation, product liability, intellectual property law, cybersecurity (NIS2), and international export controls.

As a leading Czech law firm in Prague, EU, ARROWS is uniquely positioned to be your guide. We support over 150 joint-stock companies and 250 limited liability companies, combining deep knowledge of the new EU regulatory landscape with the global perspective of our ARROWS International network. We are known for speed, quality, and a business-first mindset. We even help connect our clients to new investment opportunities.

Do not navigate this high-stakes legal environment alone. For a comprehensive legal consultation, contact our team today at office@arws.cz.

FAQ – Most common legal questions about AI & Defense Tech in the EU

1. My AI is "dual-use." Do I really need to follow the EU AI Act?

Yes. The "military exception" in the AI Act is extremely narrow and applies only to systems used exclusively for military purposes. If your AI has any civil application (like infrastructure monitoring or disaster response), it is considered dual-use and must fully comply with all high-risk AI Act rules. For a classification of your system, contact us at office@arws.cz.

2. What is the biggest liability difference between the EU and US for AI?

The EU's new Product Liability Directive (PLD) now legally defines software and AI as a "product". This makes developers subject to strict, no-fault liability and makes it much easier for claimants to win in court by allowing a judge to presume your AI was defective. If you are concerned about liability, email us at office@arws.cz.

3. Can I use the US "fair use" doctrine for training my AI on data from the EU?

No. This is a common and costly mistake. The EU does not have a broad "fair use" doctrine for this purpose. It uses a Text and Data Mining (TDM) exception, which allows copyright holders to "opt-out". Training on opted-out data is copyright infringement in the EU. For legal help with your training data, write to office@arws.cz.

4. What is the EU Data Act's impact on my satellite data business?

It is a fundamental threat to data-based business models. The Act (from Sept. 2025) likely eliminates the sui generis (special) database right for data generated by "connected products," which includes satellites. This could force you to share your data with users and competitors. To review your IP strategy, contact us at office@arws.cz.

5. I'm a US company. Do I need to worry about EU export controls?

Yes. If you are moving technology into, out of, or through the EU, you are subject to Regulation (EU) 2021/821. This runs in addition to your existing obligations under the US EAR and ITAR, creating a complex, dual-compliance burden. Our international team can manage this for you. Email office@arws.cz.

6. What is a "LAWS" system and why does it matter?

LAWS stands for Lethal Autonomous Weapons System—a system that can select and engage targets without "meaningful human control". There is a major global push to ban them under International Humanitarian Law (IHL). If your technology is part of a defense supply chain, you must be able to prove your system is not a LAWS. If you are in the defense sector, contact us at office@arws.cz.

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