The European Union can and must do more to help Ukraine fight its own corrupt oligarchs, whose money keeps being bled out to safe haven banks in London, Cyprus, Austria and Latvia, British journalist Oliver Bullough , an expert observer on Russia, Ukraine and the Caucasus region told Latvian Radio correspondent Ina Strazdiņa in Brussels Friday.

Latvian business interests in Ukraine have a special reputation amongst politicians, non-governmental organizations and residents there, claims Bullough, who has focused on Ukraine-related themes extensively. He sharply criticizes Latvia for allowing certain of its individual citizens to actively fight for power positions on the boards of companies formerly controlled by disgraced ousted president Yanukovich. Bullough says Latvia’s system allows for the oligarchs’ money to sit safely in bank accounts far from the fray.

“Maybe it has to do with Latvia’s sizable Russian-speaking society, which still has ties to Moscow,” suggested Bullough, unable to provide a solid explanation for why the country seems to be such a key player in Ukraine’s corrupted economy.

“As the economy has grown, Latvia has always been open to foreign money and banking services, and that has made the state very vulnerable, especially in light of the fact that the money could simply be withdrawn in one moment,” he said.

“Former Soviet elements wound up on the boards and at the head of these banks, who could just say: ‘No, you won’t check up on the sources of this money, or else we’ll just transfer it elsewhere’. Latvia has quite the reputation in this regard. Citizens of Latvia have been among the chiefs of Yanukovich’s firms and gotten involved in these businesses with great fervor. The network between institutions and persons interested in money laundering tends to grow stronger,” argued the British researcher.

Bullough also referred to the Kremlin’s recently dissolved Hermitage Capital foundation and its lawyer Sergey Magnitsky, accused by Russia of tax evasion after trying to blow the whistle on six officials laundering money each through a different Latvian commercial bank.

“This isn’t just money bleeding out of Ukraine. Magnitsky’s exposed money trails showed Russian flows through Latvian banks, as well. This indicates that Latvia has become a part of this network, so that if someone wants to move money from East to West, then Latvia is one of the points to do it. Though it’s not the only place on the map. Just as important are the roles played by Austria, Cyprus and London, which is essentially a safe harbor for dirty money. Latvia is just part of the problem,” he said.

Bullough believes the issue deserves particular attention at the moment the EU is trying to strengthen ties to the Eastern Partnership states and Latvia is serving its Presidency of the Council of the EU.

On his part, Finance Capital and Markets Commission head Kristaps Zakulis told Latvian Radio that Latvia’s financial supervisory system is highly regarded internationally, though it is understood that cooperation with partners from former Soviet Union countries carries greater risks than with EU and North American partners.

Zakulis said that non-resident deposits currently account for about half of all deposits in Latvian banks.