If a financial institution wishes to close an account due to concerns about potential money laundering or other financial crimes, it is generally required to file a suspicious activity report (SAR) with the appropriate government agency. However, there may be instances where the government requires the account to remain open for ongoing investigation purposes.
In such cases, the government must provide a written request under proper letterhead and authority to keep the account open. This document will serve as legal justification for the financial institution to maintain the account, even though it may pose a higher risk for money laundering or other financial crimes.

Reference:https://www.treasury.gov/resource-center/faqs/Sanctions/Documents/faq_all.html
''Who must comply with OFAC regulations?U.S. persons must comply with OFAC regulations, including all U).S. citizens and permanent resident aliens regardless of where they are located, all persons and entities within the United States, all U.S. incorporated entities and their foreign branches. In the cases of certain programs, foreign subsidiaries owned or controlled by U.S. companies also must comply. Certain programs also require foreign persons in possession of U.S.-origin goods. please refer to:https://home.treasury.gov
/policy-issues/financial-sanctions/frequently-asked-questions/ofac-consolidated-frequently-asked-questions

According to the Certified Anti-Money Laundering Specialist (CAMS) Manual [1], 6th edition, financial entities that violate Anti-Money Laundering (AML) laws can face several reputational risks such as loss of high-profile customers, seizure of assets, increased audit costs to monitor behavior, and monetary penalties.
For example, the US Treasury's Financial Crimes Enforcement Network (FinCEN) imposes civil money penalties on "persons who willfully violate, attempt to violate, conspire to violate, or cause any violation of any provision of the Bank Secrecy Act or its implementing regulations." (CAMS Manual, 6th edition, page
26).

International business corporations (IBCs) are entities that are created in jurisdictions that offer low or no taxes, high confidentiality, and minimal regulation. They are often used by individuals and businesses to avoid or evade taxes, conceal assets, and launder money. Some of the risks associated with IBCs are:
They are created in a tax haven. Tax havens are countries or territories that have low or no taxes, lax financial regulation, and high secrecy. They attract IBCs that seek to reduce their tax liabilities, hide their beneficial owners, and evade scrutiny from authorities. Tax havens pose a risk to the global financial system, as they facilitate tax evasion, money laundering, corruption, and illicit financial flows12.
They are established with nominee directors. Nominee directors are individuals who act as the legal representatives of an IBC, but have no actual control or authority over its activities. They are often used to shield the true beneficial owners of the IBC from detection and accountability. Nominee directors pose a risk to the transparency and integrity of the IBC, as they can enable fraud, tax evasion, money laundering, and other criminal activities34.
References:
1, ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 38
2, ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.3, Offshore Financial Centers
3, ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 2, page 39
4, ACAMS CAMS Certification Video Training Course, Module 2, Lesson 2.4, Money Laundering Using New Payment Methods

The USA PATRIOT Act is a comprehensive legislation that was enacted in response to the terrorist attacks of September 11, 2001, and aimed to strengthen the US government's ability to prevent, detect, and prosecute money laundering and terrorist financing. Among its many provisions, the USA PATRIOT Act contains several sections that have extraterritorial reach, meaning that they apply to foreign entities or activities that have a nexus with the US. Three of these sections are:
Section 319(b), which allows for the US Attorney General or the Secretary of the Treasury to issue a subpoena or other legal order to any foreign bank that maintains a correspondent account in the US, requiring the production of records relating to such account or any account at the foreign bank, including records maintained outside the US12. This section also allows foreign banksto voluntarily designate a registered agent in the US to accept service of such subpoenas or orders12.
Section 313, which prohibits US financial institutions from establishing, maintaining, administering, or managing correspondent accounts for foreign shell banks, which are banks thathave no physical presence in any country and are not affiliated with a regulated financial group34. This section also requires US financial institutions to take reasonable steps to ensure that their correspondent accounts with foreign banks are not being used to provide banking services indirectly to foreign shell banks34.
Section 311, which authorizes the Secretary of the Treasury to designate foreign jurisdictions, financial institutions, classes of transactions, or types of accounts as being of "primary money laundering concern" and to impose special measures to address such concerns . These special measures may include requiring US financial institutions to obtain and retain information on the beneficial owners of foreign accounts, prohibiting or imposing conditions on the opening or maintaining of correspondent or payable-through accounts for foreign financial institutions, or requiring US financial institutions to identify the customers of their foreign correspondent account holders . The Secretary of the Treasury may also order a US financial institution to terminate a correspondent account within 10 days if the foreign bank fails to comply with a subpoena or other request for information under Section 319(b) .
1: USA PATRIOT Act, Section 319(b)
2: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 121
3: USA PATRIOT Act, Section 313
4: ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 120 USA PATRIOT Act, Section 311 ACAMS, CAMS Certification Package - 6th Edition, Chapter 4, page 119 Reference:
https://www.jonesday.com/-/media/files/publications/2007/10/extraterritorial-application-of-the-usa-patriot-ac
/files/extraterritorial-application-of-the-usa-patriot-ac/fileattachment/graves_ganguli.pdf
https://www.lawfareblog.com/long-arm-us-law-patriot-act-anti-money-laundering-act-2020-and-foreign-banks