Cuba Sanctions

Cuba Sanctions Executive Order (May 1, 2026)

On May 1, 2026, President Trump issued a new Executive Order (the “May 1 EO”) establishing a new Cuba-related U.S. sanctions program in response to “repression in Cuba and for threats to United States national security and foreign policy.” The new sanctions under the May 1 EO are complementary to the existing Cuban Assets Control Regulations (“CACR”), which generally prohibit U.S. persons from providing goods or services to Cuban nationals and from dealing in any property in which Cuba or Cuban nationals have an interest, and include:

• Sectoral Sanctions. The May 1 EO authorizes new blocking sanctions against any foreign person determined “to operate in or have operated in the energy, defense and related materiel, metals and mining, financial services, or security sector of the Cuban economy, or any other sector of the Cuban economy, as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State.”
• Cuban Government-related Sanctions. The May 1 EO also authorizes blocking sanctions against foreign persons who, among other things, are determined to (i) 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 pursuant to the May 1 EO;[1] (ii) 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 May 1 EO; (iii) be a political subdivision, agency, or instrumentality of the Government of Cuba; or (iv) 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 May 1 EO.
• Human Rights and Corruption Sanctions. The May 1 EO also authorizes blocking sanctions against foreign persons who are determined to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in serious human rights abuses in Cuba; or to be responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in, corruption related to Cuba, including corruption by, on behalf of, or otherwise related to the Government of Cuba, or a current or former official at any level of the Government of Cuba, such as the misappropriation of public assets, expropriation of private assets for personal gain or political purposes, or bribery.
• Family Member and Related Party Sanctions. The May 1 EO also authorizes blocking sanctions against foreign persons who are determined to be an adult family member of a person designated pursuant to the May 1 EO or to own or control, directly or indirectly, any person whose property or interests in property are blocked pursuant to the May 1 EO.
• Secondary Sanctions. In addition, the May 1 EO authorizes secondary sanctions—in the form of prohibitions or strict conditions on the maintenance of U.S. correspondent or payable-through accounts and/or full blocking sanctions—on foreign financial institutions that the Secretary of the Treasury determines has conducted or facilitated a significant transaction for or on behalf of any person whose property or interests in property are blocked pursuant to the May 1 EO.

The May 1 EO represents a significant expansion of U.S. sanctions authorities with respect to Cuba with respect to non-U.S. persons who interact with the parties who are targeted under the May 1 EO. In particular, the May 1 EO increases the risks to foreign persons of conducting business in or involving Cuba, especially in the identified sectors: energy, defense and related materiel, metals and mining, financial services, and security and heighten the risk that commercial dealings with blocked persons could be viewed as material assistance or support for such persons that could lead to the actor being designated as a blocked person. The risks are also heightened for foreign financial institutions that conduct or facilitate significant transactions for the parties targeted under the May 1 EO, as doing so now may lead to exclusion from the U.S. financial system or designation as a blocked person. Key aspects of the May 1 EO—specifically its authorization of sectoral sanctions and secondary sanctions against foreign financial institutions—resemble the Russian Harmful Foreign Activities framework under E.O. 14024, as modified by E.O. 14114. There, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued guidance to clarify expectations for industry, both with respect to sectoral definitions and expectations of foreign financial institutions. OFAC has not yet issued similar guidance with respect to these new Cuba sanctions authorities.

Conclusion

For U.S. persons, activities in or involving Cuba remain broadly prohibited under the CACR, and the May 1 EO. For non-U.S. persons, the May 1 EO significantly increases the U.S. sanctions risks with respect to business in or involving Cuba, especially in the identified sectors. It is important to note that the new sanctions and designation authorizations apply with respect to persons who are targeted under the May 1 EO based on determinations “by the Secretary of State, in consultation with the Secretary of the Treasury or by the Secretary of the Treasury, in consultation with the Secretary of State.” Presumably, such parties will be identified on OFAC’s List of Specially Designated Nationals and Blocked Persons with a search tag specific to the new sanctions program adopted under the May 1 EO. Foreign financial institutions will need to monitor designations to avoid conducting or facilitating significant transactions for or on behalf of persons designated pursuant to the May 1 EO. S&C is closely tracking developments in this area and is ready to help clients assess and navigate the elevated risks.