The Trump Administration recently broke new ground in the seven-decade history of U.S. sanctions against Cuba, clearing the way for “secondary” sanctions against non-U.S. persons that engage in certain Cuba-related business. While the U.S. embargo against Cuba has prohibited most trade with Cuba by U.S. persons and U.S.-owned foreign entities since 1962, the United States previously had not sought to target non-U.S. persons engaged in Cuba-related activity without any U.S. nexus unless they were owned or controlled by the Cuban government or acting on its behalf.

That changed with President Trump’s issuance of Executive Order ("EO") 14404, titled “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy,” on May 1, 2026. Later, on May 7, the Trump Administration made the first sanctions designations under the new EO, targeting two Cuban entities and a Cuban government official.  The new EO figures to alter the risk calculus for non-U.S. companies engaged in Cuba-related business or with Cuba-related exposure, as it signals a clear intention by the Trump Administration to target such companies for sanctions.

Background

The longstanding U.S. embargo against Cuba, in place since the Kennedy Administration and set out in the Cuban Assets Control Regulations (“CACR,” 31 C.F.R. Part 515), “blocks” Cuba and all Cuban nationals, thereby prohibiting most trade with the island (subject to various exceptions) by “persons subject to U.S. jurisdiction.” This includes persons in the United States, U.S. citizens, U.S. permanent residents, U.S. entities, and non-U.S. entities owned or controlled by U.S. persons. The U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers the CACR under authority of the Trading With the Enemy Act (“TWEA”). 

The CACR currently is the only sanctions program maintained under TWEA, in comparison to most other sanctions programs, which are administered under the International Emergency Economic Powers Act (“IEEPA”).

EO 14404

The new EO, issued under IEEPA, authorizes the imposition of sanctions against any person worldwide that engages in certain activities with or involving Cuba. Individuals and entities sanctioned under the EO are subject to designation on OFAC’s List of  Specially Designated Nationals and Blocked Persons (“SDN List”), meaning that that they are “blocked” and that U.S. persons are required to freeze their property and interests in property and are prohibited from dealing with them. The same sanctions apply by operation of law to any unlisted entity owned individually or in the aggregate 50 percent or greater by SDNs. The EO empowers both the U.S. Secretary of State and the U.S. Secretary of the Treasury, in consultation with each other, to impose such sanctions.

Specifically, the EO authorizes the imposition of sanctions against persons determined by OFAC or the U.S. Department of State to:

  • operate in the energy, defense, and related materiel, metals and mining, financial services, or security sectors of the Cuban economy, or any other sector of the Cuban economy as determined by OFAC;
  • be owned, controlled, or directed by, or to have acted or purported to act for or on behalf of, directly or indirectly, the Government of Cuba or any person blocked under EO 14404;
  • own or control, directly or indirectly, any person blocked under the EO;
  • have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of Cuba or any person blocked pursuant to the EO;
  • be or have been a leader, official, senior executive officer, or member of the board of directors of the Government of Cuba or an entity blocked pursuant to the EO;
  • be a political subdivision, agency, or instrumentality of the Government of Cuba;
  • be responsible for or complicit in serious human rights abuse in Cuba;
  • be responsible for or complicit in corruption related to Cuba; or
  • be an adult family member of a person designated pursuant to the EO.

The EO further empowers OFAC, in consultation with the U.S. Department State, to impose sanctions on foreign financial institutions (“FFIs”) that facilitate significant transactions for or on behalf of persons blocked under EO 14404. Upon making such a sanctions determination regarding an FFI, OFAC can (a) prohibit the opening of, or prohibit or impose strict conditions on the maintenance of, the FFI’s U.S. correspondent accounts or payable-through accounts; and/or (b) designate the FFI on the SDN List.

See OFAC Frequently Asked Questions 1251-1256 for more information.

Designations Under EO 14404

The Trump Administration took swift action to make secondary designations under the new EO, targeting two Cuban entities (which already were SDNs) and a Cuban individual official on May 7. As announced in a press release by Secretary of State Marco Rubio, the sanctions designations targeted the following persons:

  • Grupo de Administracion Empresarial S.A. (“GAESA”),for operating or having operated in the financial services sector of the Cuban economy. The press release notes that GAESA controls an estimated 40 percent or more of Cuba’s economy. Notably, GAESA already was designated as an SDN under the CACR.
  • Ania Guillermina Lastres Morera,for being or having been a leader, official, senior executive officer, or member of the board of directors of GAESA. This is the only person designated on May 7 who was not already on the SDN List.
  • Moa Nickel SA,for operating or having operated in the metals and mining sector of the Cuban economy. As with GAESA, this entity already was designated as an SDN under the CACR.

Secretary Rubio’s press release ends, as have other U.S. Department of State sanctions notices in recent months, with a reminder regarding the U.S. government’s willingness to consider delisting petitions:

The power and integrity of U.S. government sanctions derive not only from the U.S. government’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons (SDN) List, but also from its willingness to remove persons from the SDN List consistent with the law.  The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.  

Compliance Considerations

EO 14404 may fundamentally alter the risk calculus for non-U.S. companies engaged in, or with exposure to, Cuba-related business that is not subject to the CACR. While the EO does not change the jurisdictional scope of the CACR, such companies now must account for the risk of secondary sanctions and likely will encounter a changed landscape in terms of risk tolerance in this context.

Specific considerations include:

  • As noted above, the EO does not alter the scope of the CACR, and thus does not newly subject non-U.S. companies to the risk of civil or criminal penalties for Cuba-related business.
  • However, the EO newly exposes non-U.S. companies to potential designation on the SDN List for engaging in a broad range of Cuba-related activity.
  • It is important to note that the EO covers dealings providing support for the Government of Cuba, which can have an outsized impact given the government’s supreme role in the economy of the communist island nation. 
  • Furthermore, there is clear risk associated with the sectors identified in the EO: energy, defense, and related materiel, metals and mining, financial services, and security.
  • Companies should note that the EO empowers OFAC to designate additional sectors for secondary sanctions. It remains to be seen whether OFAC will target other major revenue generators for the Cuban government, such as travel, tourism, and hospitality.
  • FFIs face particular risk under the EO, and can be designated on the SDN List or lose access to U.S. correspondent or payable-through accounts.
  • Companies engaging in Cuba-related business are likely to find diminished risk tolerance for Cuba-related business on the part of gatekeepers such as financial institutions and insurers, and may encounter more probing diligence questions seeking to surface Cuba-related risk vectors.
  • Companies that do not do business with Cuba but may be indirectly exposed to Cuba-related business, such as through indirect sales, may wish to consider shoring up channel partner agreements, conducting enhanced risk-based due diligence of channel partners, and carrying out periodic audits to detect Cuba-related exposure.
  • It remains to be seen whether the European Union, the United Kingdom, and China will activate their “blocking” laws to prohibit local companies from complying with EO 14404, which could significantly complicate the compliance landscape for companies.
  • Overall, the EO seems designed to impact non-Cuban companies doing business in Cuba in the same way that other U.S. sanctions have targeted non-U.S. companies trading in Venezuelan oil (prior to Nicolas Maduro’s capture) or supplying into sanctioned sectors of Russia’s economy.  Companies with such Cuba-related risk exposure should plan accordingly.

For more information or assistance, please contact Anthony Rapa, Kenneth J. Nunnenkamp, or another member of Blank Rome’s International Trade group. 

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