The BEE Commission released three practice notes on the following:
- The first serves as an interpretative guide for the recognition of Procurement Spend in terms of Statement 400 (Enterprise and Supplier Development)
- The second serves as a guide with regards to the issue of B-BBEE Certificates EMEs and QSEs
- The Explanatory Note deals with the procedure for requesting a non-binding advisory opinion from the Commission
RVN Empowerment welcomes these notes and from a verification point of view, we will ensure that procurement activities executed by our clients adhere to the practice guides below:
PRACTICE GUIDE 01 of 2016 deals with preferential procurement where a supplier has invoiced a measured entity and then "passed through" a part of the income to a third party. Only the income reflected in the supplier's books as revenue can be recognised under preferential procurement using the supplier's BEE Certificate. The note suggests that the third party's BEE certificate would be needed by the measured entity if recognition of the full amount is contemplated.
PRACTICE GUIDE 02 of 2016 deals with EMEs and affidavits. It confirms that EMEs must submit either a certificate from the CIPC or an affidavit signed by a Commissioner of Oaths in the format of the Dti template. 51% plus black owned QSEs are only required to obtain a sworn affidavit. The Commissioner emphasises that:-
- Should the empowerment status of the entity change after it has made such an affidavit, the entity is obligated to disclose that fact when submitting its B-BBEE status to any client. The longevity of these affidavits has to be taken note of;
- Organs of state must accept such affidavits and must desist from "undermining the intent and spirit of the legislation" which removes the requirement for EMEs to be subjected to a costly verification process;
- Under the Amended COGP or aligned Sector Codes, verification professionals are not permitted to issue:-
- EME certificates;
- Level 1 or 2 B-BBEE certificates for a black controlled and owned QSEs;
- Accounting officers are not permitted to issue EME confirmation letters as they were under the old codes.
EXPLANATORY NOTE - The Explanatory Note deals with the procedure for requesting a non-binding advisory opinion from the Commission and can be downloaded here
RVN Empowerment Team
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