Gross Negligence and Willful Default Defined

MoIAT defines “gross negligence” as the failure to exercise reasonable care, diligence and skill in supplying information for ICV certification. “Willful default” refers to the deliberate provision of false or misleading figures. Both can severely impact the integrity of a supplier’s ICV score and certificate.

Consequences for Suppliers

Suppliers that commit gross negligence or willful default in their ICV submissions risk punitive measures from Ministry of Industry and Advanced Technology (MoIAT), including:[1]

1. Ban from the National ICV Program

MoIAT reserves the right to permanently ban suppliers from participating in the ICV certification process if they are found to have willfully defaulted. This prevents suppliers from utilizing the program’s benefits going forward.

2. Revocation of Existing Certificates

MoIAT may revoke a supplier’s current ICV Certificate UAE if submissions contained grossly negligent or intentionally misleading information. This invalidates the certificate for presentation to participating entities.

3. Blacklisting

Suppliers facing certification bans or revocations risk being added to MoIAT’s blacklist. This bars them from bidding on contracts that require valid ICV scoring. Blacklisting can severely damage a supplier’s business prospects.

4. Legal Action

In some cases of willful economic misreporting, MoIAT may refer suppliers to the relevant legal authorities for further investigation and potential prosecution.

Therefore, it is in every supplier’s best interest to meticulously follow the ICV guidelines and ensure full transparency during the certification process to avoid penalties that can adversely impact their operations and standing in the UAE market.

Measures to Ensure Accuracy

To guarantee the credibility of submissions and prevent negligence or willful misrepresentation of information, Ministry of Industry and Advanced Technology (MoIAT) has established various controls and measures:

• Audited Financial Statements: All figures reported in the ICV Template must be aligned with and verifiable from the supplier’s latest audited financial statements prepared according to IFRS and audited by a UAE-licensed auditor. This acts as an independent validation of self-declared contributions.
• Third-party Verification: Certified professional services firms authorized by MoIAT conduct an extensive verification process to scrutinize all submitted information, supporting documents, and financial records before issuing the ICV Certificate UAE. Any discrepancies are flagged for correction.
• Random Audits:MoIAT reserves the right to conduct random audits and reviews of completed certifications. Designated MoIAT personnel can request additional documents from suppliers and certifying bodies whenever required to ensure guidelines are followed.
• Guideline Clarifications: The ICV Certification Guidelines provide comprehensive instructions on calculation methodology, inclusion/exclusion criteria, and assumptions to be applied uniformly. This prevents ambiguity and subjective interpretations.
• Consistent Accounting: Suppliers are advised to modify their accounting codes to separately track costs relevant to ICV such as local procurement, training expenses, and emiratization benefits. This facilitates ease of data retrieval and minimizes errors.
• Information Sharing: Details of suppliers found to be non-compliant with guidelines are shared among participating entities. This acts as a deterrent against attempts to deliberately misrepresent contributions.
• Digital Certification Platform: All certification activities from application to final approval are conducted digitally on the MoIAT ICV Platform. This brings in process transparency and an audit trail to identify any anomalous behavior.

Together, these controls establish a robust framework for accurate ICV submissions and enable MoIAT to take punitive action against defaulters, protecting the integrity and credibility of the ICV Program.

FAQs

Q1. What financial documents must align with ICV reporting?

A1. All figures entered in the ICV template must align with the supplier’s latest audited financial statements prepared according to IFRS and audited by a licensed UAE auditor.

Q2. How long is an ICV certificate valid for?

A2. An ICV certificate is valid for 14 months from the issue date of the audited financial statements used in certification.

Q3. What costs should not be included in ICV calculations?

A3. Excluded costs include management fees, sponsorship fees, governmental fines/penalties, charity/CSR expenses, loss on asset disposal and depreciation on excluded assets.

Q4. Can a certification be revoked after issue?

A4. Yes, MoIAT reserves the right to revoke a certificate if the supplier is found to have submitted grossly negligent or intentionally misleading information during certification.

Conclusion

In summary, gross negligence or willful default in ICV submissions undermines the integrity of the certification process. Ministry of Industry and Advanced Technology (MoIAT) reserves the right to impose serious punitive measures on non-compliant suppliers, including bans, blacklisting, ICV certificate UAE revocation and potential legal penalties. Accurate and transparent reporting as per MoIAT guidelines is important for suppliers to avoid these consequences and maintain certification eligibility.