I get it; the United States goes out of its way not to offend its Latin American neighbors, due in part to American actions, in the past, in the region, that still make governments south of the border nervous, and playing the sovereignty card. The US invasions of Panama, and of Grenada, and its former "big stick" policies, remain in the long memory of Individuals in Central and South America.
The problem for America's banks is this;
(1) The US collects information about bad actors operating in Latin America, be they corrupt politicians who also facilitate drug shipments into North America, Hezbollah agents operating out of Venezuela, or white-collar criminals who exploit American investors. It classifies this information, and keeps it out of the public domain, rarely, if ever, naming and shaming prominent Latin American leaders, and businessmen, who are really career criminals. It fears political heat, coming from Latin America, should it apply OFAC sanctions to all those who richly deserve it. It even hides the fact that some of these criminals have has their US visas quietly revoked. Only the most egregious violators are sanctioned, and generally only if America will not catch heat if it does so.
(2) American banks, whose access is generally limited to open-source data, obtained from the three major commercial off-the-shelf providers of intelligence on high-risk individuals and entities, are unaware of the dangers posed by these bad actors, and allow them to open accounts.
(3) Years later, a Federal investigation results a criminal indictment of individuals who should never have been allowed onboard by any US bank. Unfortunately, the bank did have the information that it needed to refuse the client.
(4) US regulators auditing the bank point to that specific case, and others, when declaring that the bank's AML/CFT compliance program is ineffective, and impose a Consent Decree, or worse.
While I understand the political ramifications about embarrassing the government of a Latin American country, by sanctioning one of its prominent nationals, look at the damage inflicted upon American banks, who are kept in the dark far too often.