Cuba Sanctions Update - Wind-Down Period Ends As US Designations Accelerate

OFAC FAQ 1258 – secondary sanctions risk extends beyond the SDN List

On 4 June 2026, OFAC issued FAQ 1258. OFAC advises that secondary sanctions risk under the EO extends to transactions with any entity in which GAESA, MININT, or MINFAR owns, directly or indirectly, a 50% or greater interest – even if that entity does not itself appear on the SDN List.

OFAC notes that many entities are majority-owned by one or more of these three designated organisations and therefore carry the same secondary sanctions risk. It further cautions that any non-blocked entity may become the subject of future designations.

The practical effect is that screening Cuban counterparties against the SDN List alone is no longer sufficient. Members must also consider ownership and control – in particular whether a port operator, terminal, agent, charterer, or cargo interest sits within the GAESA, MININT, or MINFAR structures – and should treat any Cuban Restrictions List (CRL) entity with heightened caution.

Key risks for shipowners and operators

• Port calls at Mariel now involve a designated GAESA subsidiary (AUSA) controlling container traffic. Members should assess whether any element of a call at Mariel – or at other GAESA-linked port facilities – involves a blocked entity or its majority-owned subsidiaries.
• Bunkers and energy cargoes touching CUPET, its subsidiaries, or its facilities carry direct exposure following the 11 June designation.
• Payments and financial routing through RAFIN, BFI, or other GAESA-linked financial channels present risk both for Members and for the banks and insurers involved, given the EO's secondary sanctions provisions targeting foreign financial institutions.
• The 50% ownership rule in FAQ 1258 means that non-listed subsidiaries of GAESA, MININT, and MINFAR present the same risk as designated entities. SDN List screening alone is not enough.
• Further designations should be expected. Four rounds have been announced since 7 May 2026, and OFAC has indicated that non-blocked CRL entities may become the subject of future sanctions actions. Members should assume that further Cuban state entities, including those in transport and logistics, may be designated at any time.

Cover

Members are reminded that cover is not available under the Club's Rules for any trade, voyage, or transaction that risks the Club being in breach of sanctions or other enforcement measures. Members who are uncertain whether a proposed fixture, cargo, counterparty, or port call may engage the EO or the CACR should seek guidance before proceeding.

What Members Should Do Now

• Confirm that any wind-down of GAESA-related dealings was completed by 5 June 2026. If not, take legal advice immediately.
• Re-screen all Cuba-related counterparties – including port operators, terminals, agents, banks, charterers, and cargo interests – against the current SDN List and the CRL, and assess ownership and control by GAESA, MININT, or MINFAR in light of FAQ 1258.
• Review any exposure to Mariel, CUPET, or Cuban financial institutions in existing or proposed fixtures.
• Consult legal advisers if you have ongoing trading relationships with Cuban state entities or operations in sectors targeted by the EO.
• Contact the Club if you are unsure whether a specific voyage, cargo, or contractual arrangement may be affected.

It should also be borne in mind that other provisions of US sanctions which remain in force against Cuba may mean that US insurers and reinsurers are unable to pay liabilities which involve Cuba or Cuban entities. Under the Rules the Club is unable to reimburse Members for sums which are unrecoverable from its reinsurers because of sanctions (for details please refer to the section headed "Club Cover" on our main sanctions webpage).