Client Alert: AI-Generated Advertising May Soon Face New Disclosure Requirements in Puerto Rico

Proposed AI Disclosure Requirements in Advertising: What Businesses Need to Know

On July 13, 2026, Senator Angel Toledo López introduced Senate Bill 1385, a proposed measure that would require companies to disclose when they use AI in advertisements targeting Puerto Rico. The bill has not yet been enacted and remains under legislative consideration. If passed, it would apply to AI-generated human figures, digital copies of real people, and chatbots that might be mistaken for humans.

Key Elements of the Proposed Legislation

As proposed, the bill would apply to advertisements and AI interactions targeting Puerto Rico consumers. Under the bill, an ad “targets” Puerto Rico if it uses geographic targeting, references local stores or prices, or if the product can be purchased or used there.

If enacted, companies would need to clearly disclose when an advertisement uses a fake AI-generated person or digitally alters a real person’s image, voice, or performance. The disclosure would need to appear in the ad itself, be easy to notice, and be provided in both Spanish and English if the ad uses both languages.

If approved, the Puerto Rico Department of Consumer Affairs (DACO) would be responsible for regulating and enforcing these requirements.

Potential Impact on Your Business

If this bill becomes law, it could affect your marketing, e-commerce, social media, influencer campaigns, chatbots, and customer service tools. Companies that produce or approve ads with AI-generated content would need controls to identify what requires disclosure.

For AI chatbots and virtual assistants, the proposed legislation would require businesses to tell consumers they are interacting with AI if asked. For high-risk interactions involving financial, legal, medical, or mental health advice, the bill would require disclosure of AI use upfront.

Under the proposed bill, companies would be responsible for what their AI systems say or do, meaning businesses could not avoid liability by claiming “the AI did it automatically.”

The bill would authorize DACO to investigate, issue stop orders and impose fines: up to $1,000 for a first violation and $5,000 for repeat violations. A 10-business-day cure period would apply to first-time issues, unless the violation is intentional, misleading, or causes immediate consumer harm.

Exceptions Under the Proposed Legislation

As drafted, disclosure would not be required for routine AI uses like spell-check, translation, subtitles, noise reduction, or color correction—as long as they do not create or significantly alter a human performance.

The bill would also exempt clearly fictional characters (such as cartoons or fantasy figures), as well as movie trailers, video game ads, and similar promotions—provided the AI content matches the creative work and does not falsely imply a real person’s endorsement.

Next Steps for Businesses

While this bill is still pending, businesses may want to begin identifying where they use AI in advertising, customer service, and consumer-facing tools for Puerto Rico. Companies could also consider reviewing approval processes to flag content that might require disclosure and evaluating vendor contracts for compliance, documentation, and liability terms.

We are monitoring this legislation as it moves through the legislative process. If you would like to learn more about Senate Bill 1385, how it could affect your business if approved, or what steps you may need to take in response, please contact your Estrella LLC representative or email Neyla Ortiz at nortiz@estrellallc.com.

This alert is provided for informational purposes only and does not constitute legal advice. Clients should consult with their Estrella LLC advisor regarding their specific circumstances.