U.S. Expands Cuba Sanctions: Analysis of New Executive Order and Early Designations

On May 1, 2026, President Trump issued Executive Order 14404 (“EO 14404” or “the Order”), expanding the scope of U.S. sanctions targeting Cuba. Building upon the national emergency the president declared in January 2026 (EO 14380), the Order introduces new authorities to target key sectors of the Cuban economy and impose secondary sanctions on foreign financial institutions (FFIs). EO 14404 establishes a new list based sanctions regime under the International Emergency Economic Powers Act (IEEPA) that operates alongside the longstanding Cuban Assets Control Regulations (CACR). In the last month, the administration has added more than 20 Cuban government entities, companies, and officials to the list of sanctioned entities. The latest developments signal a more aggressive U.S. sanctions posture toward Cuba and create new compliance considerations for U.S. and multinational companies with Cuba-related exposure.

Overview of the EO and Potential Implications

EO 14404 authorizes the U.S. Department of the Treasury (Treasury Department) and U.S. Department of State (State Department) to impose blocking sanctions on a wider range of individuals and entities. In particular, the Order targets persons determined to:

• Operate in key sectors of the Cuban economy, including energy, defense, metals and mining, financial services, and security, as well as any other sector that the Treasury Department may identify in consultation with the State Department
• Be owned or controlled by, or act on behalf of, the Cuban government or other designated persons or provide material, financial, technological, or other support to the Cuban government or blocked persons
• To be or have been a leader, official, senior executive officer, or board member of the Cuban government or a blocked entity, or to constitute a political subdivision, agency, or instrumentality of the Cuban government
• Be involved in corruption or serious human rights abuses connected to Cuba

Notably, the Order expressly authorizes the designation of adult family members of individuals designated under the EO, reflecting an effort to prevent evasion of sanctions through family members or other indirect channels. Businesses that maintain relationships with Cuban officials or their associates should carefully assess whether counterparties have family connections to blocked persons in the event that the family members are also designated.

EO 14404 also introduces a significant expansion of U.S. sanctions risk for non‑U.S. financial institutions. In particular, the Order authorizes the Secretary of State, in consultation with the Secretary of the Treasury (or vice versa), to impose sanctions against FFIs that knowingly facilitate or conduct “significant transactions” on behalf of persons designated under the Order.

This represents a notable change from the prior Cuban sanctions framework. Under the CACR, a foreign bank that processed a transaction involving a Cuban entity was generally not directly subject to U.S. sanctions, although exposure could arise where U.S. persons or the U.S. financial system (e.g., U.S.‑dollar clearing) were involved. By contrast, under EO 14404, an FFI that conducts or facilitates a “significant transaction” for a blocked person may itself become subject to sanctions. The “significant transaction” threshold is not defined in the EO itself and may be elaborated in forthcoming guidance. OFAC has, however, addressed the term across several other sanctions programs. The most directly applicable framework comes from the Iran secondary sanctions program. In FAQ 208, OFAC identified a non-exhaustive list of factors it considers in determining whether a transaction is significant, including: the size, number, and frequency of the transactions; the nature of the transactions and their commercial purpose; the level of management awareness and whether the activity forms part of a pattern of conduct; the ultimate economic benefit conferred on the designated party; and whether deceptive financial practices were used to obscure the parties or nature of the transaction.

Designations

Pursuant to the new Order, the Treasury Department’s Office of Foreign Assets Control (OFAC) and the State Department acted in concert to add several entities and persons to OFAC’s Specially Designated Nationals (SDN) list.

On May 7, 2026, the following entities and individuals were added:

• Grupo de Administración Empresarial S.A. (GAESA). The Cuban military conglomerate that controls an estimated 80% of Cuba’s economy — including tourism, retail, and import/export — was already one of the most significant blocked entities under the legacy Cuba program. However, its designation under EO 14404 raises compliance risks with regards to FFI given the potential for secondary sanctions. OFAC issued an FAQ, however, that clarifies that foreign persons, including FFIs, would not be targeted for transactions necessary to the wind down of involvement with GAESA as long as the wind down was completed by June 5, 2026.
• Moa Nickel S.A. One of Cuba’s largest mineral producers. Its re-designation under Cuba-EO confirms that OFAC is actively using the EO’s metals and mining sectoral authority.
• Ania Guillermina Lastres Morera. This individual was already listed on OFAC’s SDN List under the existing CACR program.

On May 18, 2026, the following entities and individuals were added:

• Cuba’s Ministry of Interior (MININT). Cuba’s agency for internal security, including Cuba’s police and internal security forces, intelligence agencies, and prison system.
• The Policia Nacional Revolucionaria (PNR). A police force under MININT accused of operating mobile prisons and suppressing protests.
• Cuba’s Directorate of Intelligence (DGI). The lead intelligence agency under MININT.
• Eleven senior Cuban government officials and military figures, including Luis Alberto Rodríguez López-Calleja, who heads GAESA; and Rosabel Gamón Verde, Minister of Justice.

On June 4, 2026, the following entities and individuals were added:

• Ministry of the Revolutionary Armed Forces of Cuba (MINFAR). Cuba’s defense ministry.
• Minera La Victoria S.A. A metals mining company based in Havana.
• The Committees for the Defense of the Revolution (CDR). The Cuban neighborhood surveillance group established in 1960.
• The Cuban Institute of Friendship with the Peoples (ICAP) and Amistur Cuba S.A. A Cuban government entity involved in Cuba’s foreign outreach activities. Amistur Cuba S.A. is a travel agency linked to ICAP.
• Miguel Díaz-Canal Bermúdez. Cuba’s president. His wife, Lis Cuesta Peraza, was also designated.
• Alejandro Castro Espín (El Tuerto). A senior figure in Cuba’s security and intelligence communities and the son of Raúl Castro.

U.S. persons, including U.S. financial institutions, are generally prohibited from engaging in any transaction with SDNs and are required to block (i.e., freeze) any property or interests in property belonging to SDNs.

General Licenses and FAQs

In addition to the sanction designations, OFAC also published General License 1 (GL 1), which authorizes transactions otherwise prohibited by EO 14404 where those transactions are already authorized or exempt under the CACR. GL 1 covers activity licensed under either a general or specific license issued pursuant to the CACR.

GL 1 ensures that the EO does not inadvertently disrupt commercial activity that was already permissible under the existing Cuba sanctions framework. The clearest illustration is GAESA. Without GL 1, a U.S. person holding a specific CACR license to transact with GAESA could have faced ambiguity about whether the EO’s separate blocking authority created an additional legal obstacle. GL 1 resolves that ambiguity — where a transaction is authorized or exempt under the CACR, no separate authorization under the EO is required.

Transactions that are not authorized or exempt under the CACR remain prohibited and require separate OFAC authorization to proceed.

Alongside GL 1, OFAC published six new FAQs (FAQs 1251-1256) providing initial guidance on EO 14404.

• FAQ 1251 provides a summary of EO 14404.
• FAQ 1252 confirms that EO 14404 does not alter or replace the existing CACR. The two regimes run in parallel.
• FAQ 1253 explains GL 1, which authorizes transactions prohibited by EO 14404 where those transactions are already authorized or exempt under the CACR.
• FAQ 1254 confirms that foreign persons (including FFIs) are generally at risk for transacting with GAESA following its designation. However, OFAC stated that it does not intend to target non-U.S. persons for winding down existing GAESA relationships, as long as that wind-down is completed by June 5, 2026.
• FAQ 1255 clarifies that being blocked under the CACR does not automatically result in being blocked under EO 14404, and vice versa.
• FAQ 1256 clarifies that operating in one of the five named sectors does not automatically make a person/entity a sanctions target. Sector designation creates exposure, but OFAC must separately determine that a foreign person meets the criteria.
• FAQ 1258 confirms that non-U.S. persons who transact with GAESA, MININT, MINFAR, and/or their subsidiaries run the risk of being sanctioned themselves.

Conclusion

The Order materially expands the Cuba sanctions landscape and, when viewed alongside the underlying national emergency declared in EO 14380, reflects a significantly more aggressive U.S. policy posture toward Cuba, with additional designations likely to follow.

Companies and FFI with any Cuba-related exposure should closely monitor further guidance and enforcement actions by the U.S. government. In particular, parties should implement procedures to screen against OFAC’s SDN List on a regular, ongoing basis, where not already in place, as new designations could be announced at any time. Companies should also evaluate their exposure to Cuba across key sectors — especially energy, defense, metals and mining, financial services, and security — as activities involving these areas warrant heightened scrutiny. Financial institutions should assess whether existing transaction flows or correspondent relationships involve parties that could plausibly be designated and consider whether enhanced due diligence or risk-based exit planning or decisions are appropriate in advance of new listings. Finally, parties relying on existing authorizations under the CACR should confirm that both their activities and counterparties remain permissible under the evolving framework, recognizing that a new designation may create compliance risks even where the underlying activity is otherwise licensed.

If you have questions about this Advisory or sanctions compliance, please contact your Arnold & Porter relationship attorney or any member of our Export Control & Sanctions practice.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.