What is the ICV all about?
The ICV program is an ADNOC initiative which started in 2018. The objective of the program is to optimize the value of the UAE’s oil and gas resources as well as other sectors that have adopted a similar certification process. The ICV program is also designed to deliver in-country value to the UAE through increased ICV contribution and by ensuring the private sector is able to support the development and diversification of the national economy. The procurement-focused initiative aims to achieve in-country value in three key areas: economic diversification via expenditures on UAE goods and services; personal development opportunities for Emiratis in the private sector; and the localization of capabilities for critical supply chain functions within the oil and gas industry.Do vendors/suppliers need to get in-country value certification?
The ICV program provides vendors/suppliers fresh opportunities to work with the ADNOC Group. In this program, suppliers need to include their ICV-related documents in their tenders when bidding with ADNOC. The company will consider each vendor’s ICV during the tender evaluation process. Although ICV certification is not mandatory for vendors to participate in an ADNOC Group tender, those with an ICV certificate have an advantage during the tendering process as vendors or suppliers that do not hold a certificate will have zero percent in-country value. According to ADNOC, the in-country value strategy will only succeed with the cooperation and support of all their stakeholders. Therefore, ICV certificate holders would have an edge in the tendering process.What is the ICV certificate?
Although not a mandatory requirement, all companies interested in becoming ADNOC suppliers are enjoined to possess an ICV certificate issued by an authorized ICV certifying body. Each legal entity intending to participate in tender with ADNOC or any of its group entities should ideally present an ICV certificate. The ICV certificate embodies each vendor’s value-added contributions to the UAE. The certificate is prepared based on the vendor’s or supplier’s last audited financial statements. These statements should not be older than two years from the date of certification.How do vendors obtain ICV certification?
Obtaining an ADNOC ICV certificate is pretty straightforward as long as your documents and financial statements are in order. During the process of applying for an ICV certification, do take note of the following:- Work only with empaneled or authorized ICV certifying bodies in the UAE. For example, specific business formation services in UAE like MBG Corporate Services are authorized to process ICV certification applications.
- If you hold more than one business license, you are required to apply for a separate ICV Certificate for every business license as each one is considered as a separate legal entity. But if you have a single business license and have multiple branches operating under that single license, then your company will be issued a single combined ICV certificate.
- Each vendor applying for an ICV certificate must complete the ICV certification templates.
- All figures or amounts entered in the template must be taken from the vendor’s latest audited International Financial Reporting Standards or IFRS-compliant financial statements.
- New companies (or entities that are less than ten months old) that don’t have audited financial statements can submit figures from their management accounts which should not be older than nine months. Management accounts that are older than nine months should be audited by an approved audit firm prior to them being entered in the ICV certification template.
- The ICV certificate issued to a vendor has a validity period of 18 months from either the date of initial issue or the time when a new set of financial statements have been issued (whichever of the two is earlier). Each vendor is responsible for procuring the revised ICV certificate within two months from the date of the issuance of their audited financial statements.