Article 78 — Financing agreement with Ukraine

1. The Commission shall conclude with Ukraine a financing agreement within the meaning of Article 114(2) of the Financial Regulation for the implementation of the actions set out in this Regulation which concern Ukraine or legal entities established in Ukraine receiving Union funds. 2. The financing agreement concluded with Ukraine and contracts and agreements signed with legal entities established in Ukraine receiving Union funds, shall ensure that the obligations set out in Article 129 of the Financial Regulation can be fulfilled. 3. The financing agreement shall lay down the obligations of the Ukrainian authorities and bodies entrusted with budget implementation tasks to take all necessary measures, including legislative, regulatory and administrative measures, to respect the principles of sound financial management, transparency and non-discrimination, to ensure the visibility of Union action when managing the Union funds, to fulfil the appropriate control and audit obligations and assume the resulting responsibilities, and to protect the financial interests of the Union, by, in particular, detailed enacting provisions concerning: (a) the activities related to control, supervision, monitoring, evaluation, reporting and audit of Union funding under the Ukraine Support Instrument, as well as activities related to investigations, anti-fraud measures and cooperation; (b) rules on taxes, duties and charges in accordance with Article 27(9) and (10) of Regulation (EU) 2021/947 of the European Parliament and of the Council; (c) the right of the Commission to monitor activities under this Regulation carried out by the legal entities established in Ukraine, along the whole project cycle, including for cooperation for common procurement action, to take part in those activities as observer, as appropriate, and to make recommendations for the improvement of such activities, and a commitment by the Ukrainian authorities to make their best efforts to implement such recommendations of the Commission and to report on that implementation; (d) the obligations referred to in Article 83(2), including precise rules and a timeframe regarding the collection of data by Ukraine and access to such data by the Commission and the European Anti-Fraud Office (OLAF); (e) the protection and handling of classified information in accordance with applicable rules; (f) provisions on protection of personal data. 4. Funding shall only be granted to Ukraine after the financing agreement has entered into force and the actions needed to implement the requirements it establishes have been implemented by the parties. 5. The Commission shall ensure that, from its side, all necessary steps are taken for the financing arrangement to become effective no later than 1 July 2026.