Cuba Sanctions Alert - Significant New Risks for Non-US Persons
On 1 May 2026, President Trump signed Executive Order 14404 ("EO"), titled "Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy." This marks a significant escalation in the US sanctions framework targeting Cuba and introduces material new risks for non-US persons and entities - including shipowners, operators, charterers, and financial institutions active in Cuba-related trade.
The EO operates alongside, but separately from, the long-established Cuban Assets Control Regulations (CACR), which impose a comprehensive embargo on dealings with Cuba by US persons. Crucially, the EO does not replace the CACR - both regimes now operate in parallel.
What Has Changed
Prior to the EO, the US Cuba sanctions regime was primarily a concern for US persons and their subsidiaries. The new EO changes this materially. For the first time, non-US companies - including foreign shipowners, managers, traders, and financial institutions - face the risk of being designated under US sanctions for certain Cuba-related activities, even where no US nexus exists.
The EO authorises the imposition of blocking (asset-freezing) sanctions on foreign persons determined to be:
- Operating in targeted Cuban economic sectors, specifically: energy; defence and related materiel; metals and mining; financial services; and security. The Secretary of the Treasury may add further sectors at any time. OFAC explains in FAQ 1256 that “it does not automatically impose sanctions on all persons who operate or have operated in those sectors.”
- Affiliated with the Government of Cuba or sanctioned persons - including those who have materially assisted, sponsored, or provided financial, material, technological support, goods or services to the Cuban Government or any person blocked under the EO.
- Owning or controlling a blocked person, or acting as a leader, director, or senior executive of the Cuban Government or a blocked entity.
- Responsible for human rights abuses or corruption relating to Cuba, including misappropriation of public assets or bribery.
For Foreign Financial Institutions (FFIs): The EO authorises the imposition of secondary sanctions on any FFI that conducts or facilitates a significant transaction involving a person blocked under the EO. This means foreign banks, and insurers could face US sanctions exposure for providing services in connection with Cuba-related trade that touches designated parties.
“FFI” is broadly defined to mean “any [non-U.S.] entity that is engaged in the business of accepting deposits; making, granting, transferring, holding, or brokering loans or credits; purchasing or selling [non-U.S.] exchange, securities, futures, or options; or procuring purchasers and sellers thereof, as principal or agent.” It includes, inter alia, depository institutions; banks; money services businesses; insurance companies; investment companies; and holding companies, affiliates, or subsidiaries of any of the foregoing.
New Designations - 7 May 2026
On 7 May 2026, the US Department of State made the following designations under the EO:
- GRUPO DE ADMINISTRACIÓN EMPRESARIAL S.A. (GAESA) - Cuba's military-controlled conglomerate, already on the SDN List since 2020, has had the EO added as a designation authority. GAESA has extensive interests across the Cuban economy, including tourism, retail, transportation, and port services. Non-US entities dealing with GAESA now face sanctions exposure they did not previously carry.
- ANIA GUILLERMINA LASTRES MORERA - designated as a senior official of GAESA.
- MOA NICKEL SA (MNSA) - designated for operating in the metals and mining sector of the Cuban economy.
OFAC concurrently issued General License No. 1 (GL 1) to authorize certain transactions otherwise prohibited by E.O. 14404, and published several clarifying FAQs.
In FAQ 1254 of May 7, 2026, OFAC has confirmed that it does not intend to target foreign persons (including FFIs) for transactions ordinarily incident and necessary to wind down dealings involving GAESA through 5 June 2026.
Members with existing contractual arrangements touching GAESA - including port calls, cargo operations, or financial transactions - should take immediate steps to wind down those arrangements before that date.
Key Risks for Shipowners and Operators
Members engaged in trade to or from Cuba, or with any connection to Cuban ports, state entities, or cargo, should be aware of the following:
- Port calls and cargo operations involving GAESA-controlled port operators or entities may now expose non-US owners and operators to sanctions risk under the EO.
- Cargo involving targeted sectors - including energy products, metals, and mining-related goods - may bring vessels and their operators within scope of the EO's designation criteria.
- Charterers and cargo interests connected to the Cuban Government or SDN-listed entities may expose shipowners to secondary sanctions risk simply by performing the voyage.
- The expansion of the SDN List is ongoing. Members should monitor not only for new additions but also for cases where existing SDNs have the EO added as their designation authority - a change that can materially alter the risk profile of an existing trading relationship.
Cover
Members are reminded that cover is not available under the Club's Rules for any trade, voyage, or transaction that is in breach of applicable sanctions. 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
- Review existing Cuba-related fixtures and contracts for exposure to GAESA or other newly designated entities, and take steps to wind down such arrangements before 5 June 2026.
- Screen all Cuba-related counterparties, cargo interests, and port operators against the current SDN List, noting that designation authorities may be updated without new additions to the list.
- 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).