President Donald Trump issued Executive Order (E.O.) 14404 “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy” on May 1, 2026[1]. Within a different legal framework from the previous Cuba-related sanctions, this E.O. allows the Office of Foreign Assets Control (OFAC) to designate on the Specially Designated Nationals List (SDN List) foreign persons engaged in certain activities in Cuba.
A New Legal Basis
Historically, the sanctions program imposed by the U.S. on Cuba, classified in the Cuban Assets Control Regulations (the CACR) [2], has been established under the authority of the Trading with the Enemy Act (TWEA), which contrasts with other sanctions programs, such as the Ukraine-/Russia-related Sanctions program, that have been authorized under the International Emergency Economic Powers Act (IEEPA).
The IEEPA provides the President broad authority to regulate a variety of economic transactions under the condition of a prior declaration of national emergency. President Trump had already declared the situation related Cuba to be a national emergency, as defined under the IEEPA, in E.O. 14380 of January 29, 2026.[3] This previous E.O. has not, however, allowed OFAC to make any sanctions-related designations but it imposed tariffs on goods imported in the United States.
Designations and Secondary Sanctions
E.O. 14404 now directs OFAC to impose sanctions on any foreign persons determined to:
- Operate in specified sectors. The E.O. lists the energy, defence and related material, metal and mining, financial services and security sectors of the Cuban economy, but OFAC may add additional sectors (none at the time of this article);
- Or to be affiliated with the Government of Cuba or a person sanctioned under this E.O.. This broadly covers ownership and control (whether it is by being owned, controlled or directed by), material assistance (by providing financial, material, or technological support for, or goods or services to) and leadership roles (official, senior executive directors);
- Or to be responsible or accomplice in serious human rights abuse or corruption related to Cuba.
Persons designated by OFAC would be targeted by blocking sanctions, which is the most typical type of sanctions administered by OFAC: property within the U.S. territory or within the possession of a U.S. person shall be blocked, and U.S. persons are prevented from dealing with these sanctioned persons.
Pursuant to the E.O., on May 7, 2026, OFAC designated Moa Nickel SA, for operating in the mining sector, Grupo de Administración Empresarial S.A. (GAESA) for operating in the financial services sector, and the director of the latest.[4] GAESA controls most of the tourism sector in Cuba and is owned by the Cuban military.
However, the real innovation regarding this E.O. lies into the nationality: E.O. 14404 allows OFAC to designate foreign persons (non-U.S. persons), which creates a secondary sanctions regime that was so far absent from the CACR. While the CACR already subjects US persons to restrictions related to the designation of the government of Cuba as specially designated nationals (SDNs) and nationals of Cuba as designated nationals, and related to the creation of the categories Prohibited officials of the Government of Cuba and Prohibited members of the Cuban Communist Party, the new E.O. exposes foreign persons to the risk of being themselves blocked for dealing with, or assisting, the government of Cuba, the persons it controls, or any other designated person following this E.O..
Secondary sanctions are also completed by measures targeting Foreign Financial Institutions. Those determined to have conducted or facilitated any significant transaction or transactions for a blocked person under this E.O., may be blocked themselves. In the other IEEPA’s sanctions regimes, OFAC assesses the significance of the transactions on a case-by-case basis.
Considering how dominant GAESA is in the Cuban economy, its designation may pose a notable risk of secondary sanctions for foreign institutions. Foreseeing the logistical complexity, OFAC published the FAQ 1254[5] reassuring that “the U.S. government does not intend to target foreign persons, including FFIs, pursuant to E.O. 14404 for engaging in transactions ordinarily incident and necessary to the wind down of transactions involving GAESA […] through June 5, 2026.”
Articulation between E.O. 14404 and CACR
The sanctions imposed by the CACR were already considered comprehensive as they prohibit virtually all transactions with designated nationals and impose an embargo. The CACR also built a framework of general and specific licenses to allow certain transactions, such as those related to Cuban nationals living in the U.S. or to telecommunications facilities.
To clarify, OFAC issued the Cuba-related General License 1 on May 7, 2026. It authorizes all transactions prohibited by E.O. 14404 where these transactions are authorized or exempted under the CACR. As explained in the new FAQ 1253[6], “GL 1 is intended to ensure activity authorized or exempt under the CACR is not interrupted if a foreign person already blocked or otherwise identified under the CACR is also blocked pursuant to E.O. 14404, such as Grupo de Administración Empresarial S.A. (GAESA)” (available here). OFAC emphasizes that “GL1 does not expand the scope of any authorization or exemption under the CACR.”
Immediate implications for foreign operators
The imposition of secondary sanctions forces foreign entities operating with or in Cuba to update their risk assessments regarding U.S. sanctions.
This new regime also raises technical questions regarding the timing of partners screening. For an entity already added to the SDN list under the CACR (indicated by the entry “CUBA” in the “Program” field), a new designation under E.O. 14404 is reflected only by the addition of the notation “CUBA-EO14404” following the “CUBA” notation. It may be necessary to re-screen for this new notation if/when designations begin to increase.
[1] Executive Order « Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy », published on 1 May 2026, available here: https://www.federalregister.gov/documents/2026/05/07/2026-09173/imposing-sanctions-on-those-responsible-for-repression-in-cuba-and-for-threats-to-united-states
[2] 31 CFR Part 515, available here: https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/part-515
[3] Executive Order « Adressing threats to the United States by the Government of Cuba », published on 29 January 2026, available here: htps://www.federalregister.gov/documents/2026/02/03/2026-02250/addressing-threats-to-the-united-states-by-the-government-of-cuba
[4] Press Statement « U.S. Sanctions Target Cuba’s Military Regime, Elites », published on 7 May 2026, available here: https://www.state.gov/releases/office-of-the-spokesperson/2026/05/u-s-sanctions-target-cubas-military-regime-elites/
[5] FAQ 1254 « On May 7, 2026, the Department of State designated the Cuban entity Grupo de Administración Empresarial S.A. (GAESA) pursuant to E.O. 14404. Are foreign persons, including foreign financial institutions (FFIs), subject to sanctions risk for transacting with GAESA? », published on 7 May 2026, available here: https://ofac.treasury.gov/faqs/1254
[6] FAQ 1253 « What does Cuba-related General License (GL) 1, “Transactions Authorized Pursuant to the Cuban Assets Control Regulations,” authorize? », published on 7 May 2026, available here: https://ofac.treasury.gov/faqs/1253