Abu Dhabi National Oil Company (ADNOC) introduced a program called the In-Country Value Certificate program, which has been in effect from the 1st of April 2018. The requirement of the program is that all UAE based goods suppliers acquire an In-Country Value Certificate from the ADNOC ICV Certificate agency. Along with this, the suppliers are required to get the calculated ICV score demonstrating their contribution to the previous financial year to deliver the ICV. Suppliers who are not interested in procuring the ICV Certification will be able to take part in the ADNOC group tender, though their ICV score will be considered to be zero.
ICV Certification
What is ICV Certificate?
What is the Purpose of the In-Country Value Certificate Program?
To encourage the private sector partnership in the economy built of the UAE, the ICV Certificate program was launched by the ADNOC in January 2018, effective from the 1st of April 2018. This program targets creating opportunities and a favorable environment for the local good suppliers and sub-suppliers who are involved in trade in the UAE in a very direct process or act as an intermediate contributor. This program is a part of the ADNOC’s 2030 growth strategy which aims at building socio-economic space for the local nationals and catalyze the development and transfer of knowledge among the locals. ADNOC believes that the local traders play a great role in the GDP growth and for deriving economic diversification and thus are reactive to provide support and value to the local national so that their contribution to the economy can be enhanced.
ICV Certificate has been implemented in UAE with the following objective:
Strategic Concerns: All the strategically crucial parts of the value chain will be localized for selective categories.
GDP Diversification: Encouraging business entities to source additional goods and services within UAE to support UAE GDP
Emiratization: Promotion of employment opportunities for locals/ Emiratis in the private sector of the UAE
Why is ICV Certificate important?
ADNOC launched the ICV Certificate UAE program so that the local nationals can participate in the favorable exchange of socio-economic trade and thus can potentialize their abilities to promote growth in trade. The main focus of the program is to harness the value of oil and gas reserves so that the local traders are able to support the diversification in the economy of the United Arab Emirates. This is a good opportunity for the local traders to expand their network and socialize with the reforms set for their welfare. The ICV certificate UAE needs to be attained in order to participate in the tender of the ADNOC or any of its group entities.
ADNOC ICV Certificate Agencies
Abu Dhabi Department of Economic Development has decided to standardize the process of getting an ICV Certificate in UAE, following the leadership vision and economic goals of the Government. Getting the certificate from ADNOC ICV Certificate agencies is integral but it’s not sufficient to secure the ADNOC tender, for that company needs to maintain a high ICV score. Moreover, other criteria for achieving the tender will be low price.
ICV Certificate Sample
ICV Committee has provided an ICV Certificate sample for the supplier’s submission which needs to be filled in accordance with the latest audited financial statements. ICV Certificate UAE includes all suppliers, the purpose is to evaluate the capability of the business in the following areas:
- Goods Manufactured in UAW
- Emiratizations
- Local investments
- Export of Goods and Services from UAE
- Expatriate Contribution
- Third-party spending
Who needs to have a unified ICV Certificate?
Firms or companies that are directly or indirectly working as suppliers or sub-suppliers to the government and semi-government like ADNOC Group committees, Abu Dhabi Department of Economic Development, and Aldar properties. Trading companies working as intermediate suppliers for the Abu Dhabi ports, Environment Agency Abu Dhabi, and all other government departments of the United Arab Emirates are required to have the In-Country Value certificate.
Process of ICV Certificate
ICV Certificate process starts with filling the supplier submission sample provided by the ADNOC in accordance with financial statements to show the true nature of the company’s financial position. All the information provided by the company will then be compared to the pre-defined procedures. Based on that a report will be submitted reflecting the flaws within the company and its contribution towards fulfilling the ICV Certificate purpose.
Key Areas of ICV Certificate Program
Following are the different strategies considered by ADNOC:
- Organizing training and learning sessions/programs for UAE nationals to enhance the skill and expertise of the local workforce.
- Encouraging CAPEX and OPEX development plans to attract foreign investment in the UAE.
- Establishing a sustainable and productive relationship of mutual benefit with suppliers.
The ICV Certificate UAE
IFRS based Audited financial statements
The audited financial statements form the entire basis of the In-Country Value certificate. The financial statements which have been audited must conform to the latest international financial reporting standards (IFRS). For in Country Value certificate, these statements must not be older than two years. For example, to apply for an ICV certificate in 2020, the audited statements must be for the year 2018 or later.
In-Country Value Certificate for group companies
There are companies with several branches in the same city or state performing the same activity. The licenses to the branches are allotted so as to declare them independent business entities. To overcome this ambiguity, only one combined ICV certificate is allotted to the company in that particular Emirate.
Newly established companies and management accounts for them
For younger or newly established companies or firms that are less than ten months old and do not have audited financial statements, management accounts are provided to them in this case for a period of up to 9 months for the sake of ICV calculation. Other management accounts that are older than nine months need to get audited mandatory.
The validity of Unified ICV Certificate UAE
The validity of an ICV Certificate is up to a period of 14 months, applicable from the date of issue of the audited financial statements. The Certification can be re-certified if the owner of the company wishes to do so, but the period validity that is 14 months will remain the same.
Following departments are required to acquire a unified ICV Certificate:
- ADNOC Group Companies
- Abu Dhabi Department of Economic Development
- Aldar Properties
- Abu Dhabi Ports
- Environment Agency Abu Dhabi
How is the ICV Certificate UAE issued?
Information regarding the performance of the company for the previous financial year is to be submitted by the suppliers under the ADNOC’s ICV program. To ensure that the information submitted by the suppliers is true and authentic, a panel of independent Certification bodies, established by ADNOC is appointed. Aviaan Accounting facilitates in verifying the information submitted by the suppliers for the calculation of their ICV score.
How are the ICV Certificate scores calculated?
The ICV scores are calculated according to a pre-defined methodology set by the ADNOC. The economic value adds within the United Arab Emirates for the goods or services offered by the company are assessed in order to calculate the ICV scores. Areas like services offered, goods manufacture, and exports. Investments are taken into consideration to calculate the ICV score.
The crux behind the ICV Certificate UAE
The aim of the ICV Certificate is to uplift the wills and interests of the local nationals to contribute their bit to the upliftment of the economic scenario in the Emirates. The value obtained from oils and gas reserves is used in the development of the local nationals and thus for the localization of the capabilities for some critical supplies in the intermediate or main functions in the key industry. As this initiative of in-country Value Certificate is focused on deriving optimal value from oil and gas reserves the contribution of the local chain supplies will surely help in the achievement of the required goal which is focused towards the encouragement of the private sector services and trade.
Important aspects of In-Country Value Certificate
- In order to be considered for ADNOC orders/contracts, all the suppliers need to get an ICV Certificate from an approved ADNOC agency. However, in case of no certificate, the suppliers can still apply for group tender but will be considered zero in ICV score.
- The financial reports used to get an ICV certificate should not be older than 2 years, must be audited, accurate, and free from errors.
- The validity period of the ICV certificate is up to 18 months from the date of the issue or from the date of new financial statements.
- All the suppliers must get their revised ICV certificate within two months after the issuance of new audited financial statements.
- ICV certificate is mandatory for all those companies who wishes to do business with ADNOC and intends to take part in the tender.
General information for the suppliers
The program ICV Certificate accommodates all suppliers in the United Arab Emirates. Goods manufactured in Dubai, Export of goods and services from Dubai, Third-Party spends (Procurement of goods and sub-contractors), Local investment, and Emiratization of the local workforce are examined to assess, the capabilities of the business of the suppliers.
Our Services
ADNOC has prescribed a supplier submission template (ICV Certificate Sample) that must be filled according to the latest financial audit statements. This is where Aviaan Accounting comes to your assistance. Template submission guidelines can be explained to you. Aviaan accounting helps you to know the factors that determine your company’s ICV score and how can the ICV score be increased. Drafting the ICV template based on the records of the financial year can be improved so that when it is presented to the ICV auditor, the requires ICV score can be achieved as expected.
Aviaan accounting can help in
- Improvising the ICV plans that are required to be submitted with the Tender of the ADNOC, department of economic development, and Aldar properties.
- Avoiding the seizure of ICV milestone payments by demonstrating and explaining the working criteria for the improvement of the ICV plan.
- Making you understand the factors that will help improve your ICV scores.
- Avoiding and eliminating any such factors that help in demoting your ICV scores.