An ICV Certificate UAE provides suppliers with a standardized method to showcase their economic impact to participating government and private entities that may use the certificates for procurement purposes. The certification process involves suppliers registering financial and other data on the official ICV platform and engaging an authorized certifying body to validate the information.
Calculating the Validity Period
The validity period of an ICV Certificate is directly tied to the date of the supplier’s audited financial statements used for certification. According to Ministry of Industry and Advanced Technology’s guidelines, the audited financial statements cannot be older than 2 years from the certification year.
The ICV Certificate is valid for 14 months from the issue date of the audited financial statements. This 14-month validity period aims to ensure certificates reflect relatively recent financial data while allowing multiple certifications within the 2-year time-frame of the audited statements.
Factors Impacting Validity Period
While the standard validity period is 14 months, there are a few key factors that can impact this:
| Factor | Time Period |
|---|---|
| Age of audited financial statements | Cannot be older than 2 years from certification year |
| Validity of ICV Certificate | 14 months from issue date of audited financial statements |
| New Company Exceptions | For companies <10 months old without audited statements, unaudited accounts can be used for initial 9 month period. |
| Recertification | Original 14 month period applies, not extended through recertification. |
Impact of Crossing the Validity Period
Once the 14-month validity period of the ICV Certificate ends, suppliers need to obtain a new certificate if they wish to continue participating in the ICV program. Some key implications of crossing this validity period include:
- The old certificate becomes invalid and cannot be presented to customers requesting ICV scores.
- A new certification application requiring a fresher set of audited financial statements must be submitted.
- There could be delays in the certification process as it requires preparing new audited statements (if not already available).
- The supplier may lose out on new tenders/contracts issued by participating government and private entities if unable to provide a valid ICV Certificate on time.
To avoid business disruptions, suppliers are advised to proactively plan and initiate recertification or first-time certification well in advance of the existing certificate’s expiration date. Maintaining a continuous valid ICV Certificate is important for participation in the program.
Understanding Validity Through Examples
To better understand validity periods, here are some examples of how they would apply:
Example 1: A company obtains its ICV certificate in January 2023 based on audited financial statements issued in October 2021. The certificate would be valid until December 2023 (14 months from the financial statement issue date).
Example 2: The same company obtains recertification in July 2023 using the same October 2021 financial statements. The validity remains until December 2023 – it is not extended despite recertification during the period.
Example 3: A different company obtains its certificate in January 2023 but changes certification bodies in April 2023 for the same period. The new body may reject using the same financial statements and validity period due to the change, requiring a new certification process.
Factors Affecting Local Sourcing ICV Score
The ICV score awarded to suppliers is dependent on factors like local sourcing levels, hiring of UAE nationals, investments in the country and more. Some of the key components evaluated as part of the ICV formula are:
- Manufacturing Costs in UAE – For goods manufacturers
- Third Party Spend in UAE – For service providers
- Emirati Employment – Salaries, perks, training costs
- Expatriate Contribution – Adjusted factor for expats’ spend and skills transfer
- Investments in UAE – Asset value, CAPEX, reinvestments
- Revenue from Outside UAE – ICV bonus for non-UAE sales
Higher levels of local sourcing and in-country value addition results in an improved overall ICV score. Regular certifications help track progress on these parameters over time.
FAQs
Q. What happens if the ICV certificate expires before recertification?
The expired certificate becomes invalid and cannot be presented for tenders requiting a valid ICV score. Suppliers will need to obtain a new certificate through fresh certification.
- Can an ICV certificate validity be extended?
No, the standard 14 month validity period cannot be extended, even if the company undergoes recertification during this time using the same financial statements.
Q. What happens after the validity ends?
Companies must obtain a new ICV certification and certificate using more recent audited financial statements once the original validity period lapses.
Q. Does changing certification bodies impact validity?
Yes, changing bodies during a certification year without proper reason provided could affect the certificate validity and require re-evaluation or new certification.
Conclusion
Adherence to the 14-month validity period of ICV Certificates is important for continued participation in the UAE’s in-country value program. Regular monitoring and timely recertification ensures suppliers have a valid certification at all times to meet contractual requirements. Following the guidelines issued by MOIAT helps ensure smooth certification and avoidance of business disruptions.