U.S. Expands Cuba Sanctions, Part 2: New Designations and Wind-Down Window Closing Fast for Guernsey-based CEIBA Investments

Key Takeaways

• On June 11, 2026, President Trump issued Executive Order 14404 (“EO 14404” or “the Order”) which expanded the scope of U.S. sanctions targeting Cuba. (See our prior analysis here).
• What has happened since? On July 23 and August 6, 2026, the U.S. Department of State designated a second wave of Cuban and foreign parties under EO 14404 — Cuba’s energy sector, networks alleged to shield GAESA assets, the overseas medical missions program, and the defense sector and its foreign procurement channels. 
• What makes this round of designations different? Where the Order previously targeted entities based in and operating from Cuba, the latest list includes Ceiba Investments Limited, a Guernsey-based investment firm with interests in Cuban real estate. The block reaches any entity in which Ceiba holds, directly or indirectly, a 50 percent-or-greater interest — named on the SDN List or not.
• What does Ceiba’s designation mean for U.S. businesses and individuals? U.S. holders of Ceiba debt or equity face immediate restrictions. OFAC GL 2 and GL 3 provide a narrow path to compliance: they authorize winding down dealings with Ceiba and its 50 percent-or-greater-owned subsidiaries, divestment or transfer of Ceiba debt or equity holdings to non-U.S. persons, settlement of pre-designation trades, and the wind down of certain derivative contracts. New investments in Ceiba, new purchases of its debt or equity, or transfer of such interests to blocked persons are all prohibited.
• The wind-down window closes August 22, 2026. Activity that cannot be completed by the deadline will require a specific license from OFAC.
• Non-U.S. investors and businesses may be exposed, too. Ceiba’s non-U.S. shareholders, lenders, joint-venture partners, and service providers are not directly bound by the new restrictions, but the State Department has warned that continued dealings may expose them to secondary sanctions under EO 14404, and to derisking by U.S. and international financial institutions.
• Steps to take now. Affected businesses and investors should
  1. screen counterparties, holdings, financing arrangements, and supply chains against the new designations and their majority-owned subsidiaries; 
  2. map direct and indirect Ceiba exposure, including through funds, nominees, and joint ventures; 
  3. decide what can be wound down or divested under GL 2 or GL 3 by August 22, 2026, and what needs a specific license; 
  4. route any payment to a blocked person to a blocked interest-bearing account in the United States and file blocking and rejected-transaction reports with OFAC on time; 
  5. halt prohibited activity and refresh screening lists, contractual representations, and onboarding procedures; and 
  6. document relevant diligence and decisions as you go.

New U.S. Sanctions against Cuba-linked Entities

On July 23 and August 6, 2026, the U.S. Department of State announced new sanctions targeting entities and individuals alleged to support the Cuban regime through activities in Cuba’s energy and financial services sectors, sanctions evasion networks, overseas medical missions program, and defense sector. The designations were imposed pursuant to Executive Order (EO) 14404, Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy, issued on May 1, 2026, which significantly expanded the U.S. government’s sanctions authorities with respect to Cuba. As discussed in our previous advisory, EO 14404 and the new designations demonstrate the Trump Administration’s increased willingness to leverage these authorities to target key sources of revenue and support for the Cuban regime.

As a result of these actions, both U.S. and non-U.S. persons should take care assessing transactions and other business operations for any involvement of one or more of the newly designated entities. Ongoing business dealings with these entities may entail substantial risks under U.S. sanctions, as described in more detail below.

Latest Designations

On July 23, 2026, the State Department designated the following entities for operating in Cuba's energy sector:

• Centro de Investigaciones del Petróleo S.A. (CEINPET), the research and development arm of state oil company Unión Cuba-Petróleo (CUPET).
• Empresa de Energía S.A. (ENERSA), an importer of gas, liquefied gas, and lubricants.
• EINARBO S.A., an importer of gas, liquefied gas, and lubricants.

These designations underscore the Administration’s focus on sectors viewed as significant sources of revenue for the Cuban government.

On July 23, 2026, the State Department also designated entities allegedly involved in efforts to shield Cuban government assets from U.S. sanctions, particularly those associated with the military conglomerate GAESA:

• Ceiba Investments Limited (Ceiba), a Guernsey-based investment firm with interests in Cuban real estate. The State Department alleges that one of Ceiba’s subsidiaries assumed ownership of a former GAESA joint venture following GAESA’s designation.
• Terminal de Contenedores de Mariel S.A., the principal container terminal operator at the Port of Mariel.
• Coral Marítima S.A., which allegedly received ownership interests associated with the Port of Mariel through a June 2026 restructuring transaction.
• Orbit S.A., a remittance-processing company that the U.S. government alleges is controlled by GAESA.

These actions reflect continued U.S. scrutiny of restructurings and intermediary arrangements perceived as attempts to evade existing sanctions.

Also on July 23, 2026, the State Department targeted entities and officials associated with Cuba’s overseas medical missions program, which the U.S. government has characterized as involving forced labor and serving as a significant source of foreign currency for the Cuban government:

• Comercializadora de Servicios Médicos Cubanos S.A. (CSMC), the state-owned enterprise responsible for administering Cuba’s international health services exports.
• Unidad Central de Cooperación Médica (UCCM), an agency within Cuba’s Ministry of Public Health responsible for recruiting medical personnel for overseas assignments.
• José Angel Portal Miranda, Cuba’s Minister of Public Health.
• Gretza Sánchez Padrón, Director of UCCM.

On August 6, 2026, the State Department designated the following individuals and entities for their alleged support of Cuba’s defense sector and foreign military procurement activities:

• Empresa Cubana Importadora y Exportadora de Productos Técnicos (TECNOIMPORT), a GAESA subsidiary involved in importing military equipment for Cuba’s Ministry of the Revolutionary Armed Forces (MINFAR).
• Sociedad Mercantil DUNA S.A. (DUNA S.A.), a Cuban company involved in importing military-related equipment.
• Unión de Industria Militar (UIM), a military holding company responsible for the production, repair, and modernization of weapons systems and military equipment.
• Empresa Militar Industrial Yuri Gagarin (EMI Yuri Gagarin), a military enterprise involved in the maintenance and repair of Cuba’s fleet of Russian-origin aircraft.
• TECNOTEX S.A. (Empresa Cubana Exportadora e Importadora de Servicios, Artículos y Productos Técnicos Especializados S.A.), a GAESA subsidiary that supplies equipment, technology, and other goods to Cuba's defense and security sectors.
• Roberto Jesús Viciana Mousset, Director General of UIM and a Brigadier General in the Revolutionary Armed Forces.
• Heriberto Sánchez Alleyne, an official associated with TECNOTEX.
• Álvaro Victoriano López Miera, Cuba's Minister of the Revolutionary Armed Forces. Roberto Legra Sotolongo, Chief of the General Staff of the Revolutionary Armed Forces and First Deputy Minister of MINFAR.
• Oscar Enrique Biosca Gallego, head of MINFAR’s Economic Directorate.
• José Antonio Remón Rodríguez, head of MINFAR’s Foreign Relations Directorate.
• Mónica Milián Gómez, Cuba’s military attaché in Russia.
• Waldo Pérez Cortés, Cuba's military attaché in China.

As a result of the designations, all property and interests in property of the designated persons that are in the United States or within the possession or control of U.S. persons are blocked. U.S. persons are generally prohibited from engaging in transactions or dealings involving the designated parties, as well as any entities owned, directly or indirectly, by 50 percent or more by one or more blocked persons.

The State Department further emphasized that non-U.S. persons should exercise caution when engaging in transactions involving the newly designated parties, as such dealings may expose them to secondary sanctions or other enforcement risks under EO 14404.

General Licenses

Concurrent with the July 23 designations, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General Licenses (GLs) 2, 3, and 4, providing limited authorizations intended to mitigate the immediate impact of the sanctions, particularly with respect to Ceiba and certain diplomatic activities.

• GL 2 authorizes transactions ordinarily incident and necessary to the wind down of transactions involving Ceiba and certain entities in which Ceiba owns, directly or indirectly, a 50 percent or greater interest by August 22, 2026, provided that any payment to a blocked person is made into a blocked interest-bearing account located in the United States. 
• GL 3 provides a limited authorization for transactions involving debt, equity, and derivative contracts related to Ceiba and entities owned 50 percent or more by Ceiba. Specifically, the license authorizes transactions ordinarily incident and necessary to the divestment or transfer of Ceiba debt or equity holdings to non-U.S. persons by August 22, 2026, as well as activities necessary to facilitate, clear, and settle trades initiated before Ceiba’s designation. The GL also authorizes the wind down of certain derivative contracts involving Ceiba or linked to Ceiba debt or equity. However, it does not authorize U.S. persons to purchase new Ceiba debt or equity, invest in Ceiba, or transfer such interests to blocked persons.
• GL 4 authorizes transactions involving persons blocked pursuant to EO 14404 that are ordinarily incident and necessary to the conduct of the official business of third-country diplomatic and consular missions in Cuba. The GL also authorizes certain transactions necessary to maintain accounts and process funds transfers for employees, grantees, and contractors of such missions.

Conclusion

The July and August 2026 designations illustrate the broad scope of EO 14404 and the Administration’s willingness to deploy its authorities against an expanding range of Cuban government entities, military enterprises, government officials, and foreign commercial actors. Companies with direct or indirect exposure to Cuba should carefully assess their counterparties, investments, financing arrangements, supply chains, and other business relationships for potential links to newly designated parties or their majority-owned subsidiaries. Given the State Department’s emphasis on secondary sanctions risk, non-U.S. companies and financial institutions should likewise conduct enhanced due diligence when engaging in Cuba-related transactions.

How Arnold & Porter Can Help

Arnold & Porter's Export Control & Sanctions practice advises U.S. and non-U.S. companies, investors, funds, and financial institutions facing precisely this kind of exposure.

We help clients with exposure mapping and counterparty diligence, including tracing indirect ownership under OFAC’s 50 percent rule; wind-downs and divestments within general license deadlines; specific license applications, guidance requests, and delisting petitions before OFAC and the State Department; blocking and rejected-transaction reports; blocked accounts and frozen assets; secondary sanctions and derisking for non-U.S. parties; contractual rights and remedies triggered by a counterparty's designation; and sanctions compliance programs. We also represent clients in OFAC enforcement inquiries, voluntary self-disclosures, and internal investigations, working alongside our corporate, funds, finance, and litigation teams when a designation occurs mid-transaction or mid-dispute.

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.