ADNOC introduced an ICV certification program as a part of its In-Country Value addition drive.

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The ICV certificate will help add credibility to the ICV score of organizations. Due to the UAE government encouraging local production and manufacturing, such ICV certification has become quite popular. As a result, ICV certification services have mushroomed all over the UAE. But what do ICV certification bodies in UAE do, and why is it so important? In this article, we will take a look at ADNOC ICV certification agencies, and how the process of ICV certification works.

What are the ICV certification services?

In-Country Value addition is the process by which companies and organizations will add more economic value to the UAE. By localizing their production and operations, such moves will help boost the national economy. The ADNOC released guidelines regarding the need for ICV certification in 2018. Since then ADNOC has asked their suppliers to supply information regarding their ICV scores in their tenders. The suppliers must get their scores approved by an agency in the ADNOC ICV approved auditors list.

Why is ICV Certification important?

The ICV system was implemented by ADNOC in order to assist the economy of the UAE. These kinds of measures can be beneficial to the economy since they can help businesses get their produce from local suppliers and invest in improving the infrastructure in the area. In addition, the in-country value addition project will contribute to the development of additional employment possibilities in the private sector for the communities that are located within the country. Additionally, the move will boost the United Arab Emirates’ efforts to diversify its gross domestic product (GDP) by localising essential components of the value chain of the corporation.

All ADNOC suppliers will be required to declare and report their ICV certificate and score as part of this programme. A few ADNOC ICV certification agencies have been established to ensure consistency in this declaration. These agencies will review and analyse the suppliers’ operations to ensure they are using the correct methodology to calculate their scores.

What is ICV Certificate?

All ADNOC suppliers will have to obtain an ICV Certificate issued by an ADNOC approved certifying agency. While suppliers without such a certificate may take part in tenders, they will suffer a considerable disadvantage. Since their ICV score will be considered to be zero, their application will not have the same quality of one by a company with a high ICV score. Hence, all suppliers should undergo an ICV audit and obtain an ICV certificate.

All legal entities that wish to take part in group tenders must therefore obtain an ICV certificate. The certification process requires the company’s financial statements from the previous year as proof of documentation. Furthermore, the process of ICV certification is continuous, and the entities will have to repeat the procedure every year. Every certificate will be valid for 18 months, following which the entity will have to reapply by submitting newer, more recent fiscal records.

What are the responsibilities of an ICV Certifier?

ICV Certifiers have the following fundamental duties:

Perform tests to ascertain the processes of suppliers
Review information and financial data provided by suppliers
Issue Factual Finding Reports
Scrutinize and review all ICV programs
Ensure that the ICV score calculated is genuine and issue an ICV certificate
Attend ICV Certifiers board meetings
Give access to review papers

Need for ICV Certification in UAE

Recently other services, such as the ALDAR, Abu Dhabi Ports and the Economic Department have also started the ICV program. Hence, all companies which supply goods and services to these entities will need to undergo an ICV audit. Such an audit will help then review their procedures and internal controls. It will also check whether the company has calculated its ICV score accurately. In case the company has followed government guidelines, the certifying agency will grant the entity an ICV certificate. Hence, this certificate acts as proof that the ICV score quoted by the company is true and accurate. The goals for this program are as follows;

Emiratisation: Helps create better employment opportunities for localities within the UAE’s private sector
GDP diversification: Supports the nation’s plan to diversify its GDP by producing more products and services locally
Strategic objectives: Localizing important value chain components will provide Emirati companies with a strategic advantage