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AI translation failures—an unseen risk undermining corporate compliance

August 28, 2025

📝Editor’s Note

A new wave of tech risk is emerging—from flawed AI translation tools to defense systems under regulatory scrutiny. This edition sheds light on how accuracy and standards matter more than ever in safeguarding compliance and trust.

AI translation failures—an unseen risk undermining corporate compliance

ASTA-USA, a leading human-driven translation firm, has issued a stark warning: AI-powered translation errors can cause catastrophic fallout. A single mistranslated contract clause can derail billion-dollar mergers, nullify deals, or even trigger diplomatic incidents. 

In one vivid example, a medical misdiagnosis arose after “intoxicado” was wrongly translated as “intoxicated” instead of “poisoned,” resulting in a US$71 million lawsuit. Regulatory bodies like USCIS already reject machine-translated asylum documents because of accuracy and confidentiality concerns. ASTA-USA urges compliance leaders to reassess reliance on AI translators—especially for legal, medical, or international materials—and consider human verification to avoid invisible yet lethal errors that can wreck reputations and finances.

✅ Best Practice Spotlight

Embedding Translation Accuracy into Compliance Controls

  1. Avoid using AI-only translation for legal or regulatory documents.

  2. Use human review for critical communication—especially contracts and compliance filings.

  3. Build a verification process: translation, independent proofreading, executive sign-off.

  4. Document translation workflows to support audit trails and regulatory scrutiny.

  5. Train staff on language risks and cultural nuances to prevent misinterpretation.

🛠️ Tool of the Week

SOC 2 Compliance Software

Look for software platforms designed to help companies meet SOC 2 standards for security, availability, processing integrity, confidentiality, and privacy. Some features to consider include:

  • Automates collection of evidence and audit readiness tasks.

  • Provides templated controls and policies mapped to SOC 2 criteria.

  • Enables real-time monitoring and evidence tracking.

  • Supports employee training and attestation workflows.

  • Offers integrations with IT systems for log aggregation and reporting.

🌟 Leader Spotlight

Viable Power’s MIL-STD prowess strengthens U.S. Navy compliance

Viable Power Conversion Technologies Inc., via the Canadian Commercial Corporation, has won a key U.S. DoD contract to supply power units for the Navy’s Identification Friend or Foe (IFF) systems. Their equipment meets stringent military standards—MIL-STD-704 and MIL-STD-1399—ensuring compatibility and resilience in harsh marine environments. Viable Power’s compliance with these specs has solidified its reputation in defense procurement and showcases how technical accuracy supports trust and reliability in high-stakes compliance scenarios.

🗳️ Your Compliance Take

Here are the results of our Tuesday’s poll.

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