Introduction to the National In-Country Value Program (ICV).
The National In-Country Value Program (ICV) is a strategic effort that promotes economic growth and sustainability within a country. Updated standards, enacted in October 2023, have streamlined the ICV program’s implementation, increasing its effectiveness and adaptability.
A Smooth Journey through the ICV Platform
The official ICV Platform is easier to navigate, providing vendors with a more user-friendly experience.
The In-Country Value (ICV) Program: Updated Entities, Guidelines, and Evaluation Process
Governmental authorities and actively involved companies participate in the In-Country Value (ICV) program.
- Suppliers, defined as legal companies that get the ICV Certificate, are evaluated by Certifying Bodies—professional firms authorised by MoIAT for validation.
- Significantly, new standards require audited financial statements to comply with International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA).
- Furthermore, the ICV Certificate obtained through the official ICV Platform reflects the Supplier’s ICV score.
Revised ICV Platform Registration Procedure:
According to the modified 2023 rules, the ICV Platform Registration Process is as follows:
- Visit the official ICV Platform at https://icv.moiat.gov.ae/.
- Use your UAE Pass credentials to log in.
- If the company doesn’t already have a profile, start the registration process by clicking the “Register Company” option.
- Follow the prompts to complete the company registration procedure.
NAFIS Registration Requirement
The prior instructions did not include the NAFIS registration link, but the October 2023 guidelines do. Suppliers are now obliged to register as ‘Partners’ on the NAFIS platform at https://nafis.gov.ae. This registration is required for all private enterprises before obtaining the ICV (In-Country Value) Certificate.
Formula Enhancements for Product Manufacturers
In the amended criteria, goods manufacturers will face a more refined review. Beyond typical criteria such as Manufacturing Cost and Investment, the inclusion of an Advanced Technology and Sustainability Bonus demonstrates a commitment to innovation and environmentally responsible practices.
Enhancements to the ICV Formula for Service Providers
The guidelines for the ICV (In-Country Value) formula for service providers, which were implemented in 2023, include a Sustainability Bonus, whereas the previous guidelines only considered Third Party Spend Cost, Investment in UAE, Emiratization, Expatriate Contribution, and the Bonus criteria, which include Revenue from Outside UAE, Emirati Headcounts, and Investment Growth.
ICV Calculation Criteria for Third-Party Service Providers.
Third-party service providers must undergo rigorous review, which includes the implementation of a Farmer Score. The improved exclusions from total expenses demonstrate a nuanced approach that recognises and incentivises varied contributions.
Exclusions From Total Costs
- Certain charges are removed from the total costs used to calculate ICV.
- Management fees (amounts paid to board of director members)
- Sponsorship fees (payments made to the company’s sponsor in the UAE)
- Governmental fines, penalties, and taxes
- Charity donations/expenses for Corporate Social Responsibility
- The updated criteria include the following additions to exclusions:
- Loss from asset selling or foreign exchange
- Depreciation of excluded assets
These changes are intended to give a more complete and up-to-date approach to ICV calculations for third-party service providers.
Considerations for Donation in ICV Calculation (AED)
In the context of calculating In-Country Value (ICV), the guidelines currently indicate that only donations made to Sondoq Al Watan or the following Government Universities/Education Institutes are considered:
- UAE University
- Higher Colleges of Technology
- Zayed University
- Khalifa University
- Petroleum Institute
- New York University AD
According to the revised recommendations, these are the only entities for whom donations are considered in the ICV audit, indicating a more precise and specific approach than in prior guidelines.
Updated Guidelines include the introduction of advanced technology and the sustainability bonus for goods manufacturers.
The amended guidelines include a template for the Advanced Technology and Sustainability Bonus designed exclusively for Goods Manufacturers. This addition represents a greater emphasis on fostering and recognising technological developments and sustainable practices in the manufacturing industry.
Integrating Sustainability Criteria for Service Providers: A New Dimension in Updated Guidelines.
Sustainability is a notable addition to the most recent rules for service providers. This addition emphasises the relevance of sustainable practices in the service sector.
ICV Program: A Progressive Shift Towards Sustainability
The National In-Country Value Program (ICV) standards for 2023 reflect a progressive shift towards simplicity, clarity, and sustainability. The modifications, which range from shortened introductions to user-friendly platforms, aim to improve accessibility for participants. Notable modifications include a more refined evaluation method for goods makers, the implementation of sustainability bonuses, and the inclusion of advanced technology criteria.
The integration of NAFIS registration and contribution considerations further tailors the ICV program, resulting in a more nuanced and comprehensive approach. As we examine these revisions, it becomes clear that the ICV program is more than just developing; it is embracing a future distinguished by innovation, environmentally sensitive practices, and a dedication to holistic economic development.