Union Latinoamericana is not a real international organization, rather it is a private initiative and website.
Manuel Lebrón, 8 June 2008
A broad yellow diagonal between two blue wedges, carrying two stylistic sweeps of red, one vaguely shaped like South and Central America, the other a crescent shape to the upper right. Behind is a green circle, with two series of 18 and 2 stars. In the lower left is blue disk with a white shape on it.
The flag was developed as a result of a competition on the internet. The common definition of Latin America is the 16 countries in the Americas that speak Spanish plus Brazil and Haiti (see, for instance. Or, alternatively, all the independent countries in Central and South America and in the Caribbean that have a Latin language as official language. The problem with this flag is that it has to be changed if some other Latin-speaking territory becomes independent in that geographic area. It could happen, namely with the French possessions.
The Unión Latinoamerican itself seems to regard 21 entities as comprising it- the 18 independent Spanish-speaking Western Hemisphere nations, plus Puerto Rico, and Brazil and Haiti.
There is no symbolism attached by the author to the position of the stars, only to their quantity.