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This report examines the introduction of an AI-usage policy within a Software Engineering course, aiming to overcome the challenges of incorporating generative AI (genAI) tools in academic settings. As the debate around the impact of technologies like ChatGPT in education continues, this policy represents a proactive stance, addressing both the opportunities and risks associated with AI tool usage. With N=86 students, this course implemented a policy that promotes responsible AI use through guidelines and an "AI-usage disclosure" form for coursework submissions. This approach sought to improve AI literacy, ensure academic integrity, and mitigate potential academic misconduct cases. Despite challenges, including adherence to AI disclosures and the evolving definition of AI tools, the policy promoted a more inclusive learning environment and encouraged a deeper understanding of AI’s role and limitations in …