The demand to set KNAB in order after years of internal wrangles that are widely assumed to have affected its operational effectiveness will come in the Commission's annual recommendations for action, sent to all European Union member states.
As in previous years, Brussels also points to problems in health care, education and the judicial system, which are seen to discourage potential foreign investors from putting their money into the country and creating new jobs.
The report is die to be published officially on Friday but Latvian Radio has obtained a draft of the document which shows that Brussels is worried about the perpetual wrangles within KNAB.
Internal disagreements hamper KNAB's work, undermine the prestige of official institutions in the eyes of society and scare off potential investors, the report says.
Brussels believes that KNAB's effectiveness falls behind that of comparable institutions in other EU member states and the cause is the spate of personality clashes and power battles that have wracked KNAB for years.
The perception of the courts as weak and far too slow further compounds the problem and causes investors to look elsewhere, the Commission will point out.
Numerous other areas come under fire, including the busting of the myth of a "small and professional public administration" which in reality simply means more and more tasks are heaped upon hapless staff, causing problems in the recruitment and retention of suitably qualified workers in the public sector.
The Commission is not the first international organization to express concern about the role and effectiveness of KNAB. In October last year the Organization for Economic Cooperation and Development (OECD), of which Latvia is keen to become a member, expressed similar concerns.
Indeed Latvia's OECD membership bid is currently in the balance with worries about money laundering and other forms of corruption causing concern among existing OECD members.
The Brussels report is likely to increase pressure on KNAB chief Jaroslavs Streļčenoks.