Relating to the creation of the criminal offense of possession, promotion, or production of certain obscene visual material appearing to depict a child.

Contracts

• Terms of Service (ToS) & AUP: You must amend user agreements to explicitly prohibit "synthetic, AI-generated, or animated depictions of minors in a sexual context."
• Data Vendor Agreements: Insert strict indemnification clauses requiring data vendors to warrant that training datasets have been scrubbed of images of minors used for prohibited training purposes.
• Insurance Policies: Review Directors & Officers (D&O) and Cyber Liability policies. Most contain "criminal conduct" exclusions; verify if defense costs are covered for executives charged under this statute.

Hiring/Training

• Trust & Safety Teams: Staff reviewing flagged content require specific legal authorization and updated psychological support resources, as they are now handling material classified as a felony.
• Developer Training: Engineering teams must be trained on the new criminal liability associated with "scraping" datasets that may inadvertently contain child images used for model training.

Reporting & Record-Keeping

• Data Provenance Logs: Maintain immutable logs detailing the source of AI training data and the filtration methods applied *before* ingestion to establish a defense against "knowing" violations.
• Deletion Certificates: Implement "hard delete" protocols. Removing content from a UI while retaining it on a backup server constitutes "possession." You must document the permanent destruction of non-compliant data.

Fees & Costs

• Legal & Technical Audits: Budget for immediate legal review of datasets and technical costs to upgrade moderation tools (e.g., moving from hash-matching to AI-based visual classifiers).
• Potential Penalties: Fines up to $10,000 per offense, plus legal defense costs which are likely uninsurable.