United States Targets Dealings of Foreign Companies and Financial Institutions with Cuba

On May 1, 2026, President Donald Trump signed Executive Order 14044, “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy” (the “EO 14404” or the “Executive Order”), significantly expanding the US sanctions regime against Cuba and increasing sanctions exposure for foreign companies and financial institutions engaging in Cuba-related activities. EO 14404 represents an escalation in the Trump Administration’s continued maximum-pressure campaign on the Cuban government, which build on top of the long-standing, comprehensive Cuban embargo administered through the Cuban Assets Control Regulations (“CACR”). Following issuance of the Executive Order, on May 7, 2026, the State Department designated GAESA, Cuba’s prominent military-controlled conglomerate, while OFAC issued a General License and guidance to clarify the scope of EO 14404.

EO 14404 builds on Executive Order 14380 of January 29, 2026 (“EO 14380”), which declared a national emergency with respect to Cuba and established a framework for the imposition of tariffs on countries that supply oil to Cuba. To date, the Trump Administration has not imposed new tariffs pursuant to EO 14380, and only Russia has supplied oil to Cuba since January 2026.

This Legal Update, which follows our prior Legal Update on EO 14380, summarizes EO 14404’s key provisions and implications for businesses with potential Cuba-related exposure. The White House also issued an accompanying Fact Sheet on the executive action, highlighting the Trump Administration’s continued efforts to counter the Cuban regime and those who support it (the “Fact Sheet”). These Cuba-related measures further the Administration’s broader regional strategy following recent actions involving Venezuela and other US adversaries in the Western Hemisphere.

Key Features of the Executive Order

Authorizes designation of foreign persons engaged in broad range of Cuba-related activities

EO 14404 marks a significant escalation of US sanctions pressure on Cuba to hold the Cuban regime accountable for national security threats which the Administration indicates include supporting hostile actors, terrorism, and regional instability. The Executive Order authorizes both, the Secretary of State and the Secretary of Treasury, in either case in consultation with one another to impose comprehensive blocking sanctions against any foreign person determined to be engaged in a wide range of Cuba-related activities, as follows:

• Sector-Based Sanctions: Anyone determined to operate, or have operated, in the energy, defense and related materiel, metals and mining, financial services, security sectors of the Cuban economy, or any other sector designated by the Secretary of the Treasury, in consultation with the Secretary of State;
• Cuban Government Affiliation:
  • Any political subdivision; agency, or instrumentality of the Government of Cuba; or
  • Any leader, official, senior executive officer, or board member of the Government of Cuba, or any entity sanctioned pursuant to EO 14404;
• Human Rights Violations and Corruption: Any person responsible for or complicit in, or that has directly or indirectly engaged in, or attempted to engage in, serious human rights abuse in Cuba or corruption related to Cuba, including corruption by, on behalf of, or otherwise related to the Government of Cuba, or a current or former official at any level of the Government of Cuba, such as the misappropriation of public assets, expropriation of private assets for personal gain or political purposes, or bribery;
• Supporters, Affiliates and Family Members of Sanctioned Persons:
  • Any person directly or indirectly owned, controlled, directed by, or acting for or on behalf of the Government of Cuba or any person sanctioned pursuant to EO 14404;
  • Any person that directly or indirectly owns or controls any person sanctioned pursuant to EO 14404;
  • Any person that has materially assisted, sponsored, or provided financial, material, or technological support, or goods or services, to the Government of Cuba or any person sanctioned pursuant to EO 14404;
  • Any adult family member of a person designated under EO 14404.

Any and all property and interests in property of persons designated pursuant to EO 14404 that are in the United States, that come within the United States, or that are or come within the possession or control of any United States persons are blocked. EO 14404 also prohibits US persons from engaging in or facilitating virtually all dealings involving persons sanctioned under the EO 14404, directly or indirectly, including without limitation the provision or receipt of funds, goods or services to or for the benefit of those sanctioned persons. The Executive Order also prohibits any evasion of, or attempts or conspiracy to violate, these restrictions.

EO 14404 also restricts US entry for any person designated thereunder unless the Secretary of State, or the Secretary of State’s designee, determines that the person’s entry is in the national interest of the United States.

Authorizes Imposition of Secondary Sanctions on Foreign Financial Institutions

EO 14404 also authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to impose secondary sanctions on any foreign financial institution that they determine has conducted or facilitated a significant transaction on behalf of a person designated under EO 14404. Authorized restrictions on such foreign financial institutions include prohibiting or conditioning the opening of or maintenance of correspondent accounts or payable-through accounts in the United States, or the imposition of blocking sanctions against such foreign financial institutions. Notably, OFAC defines “foreign financial institution” broadly, expressly covering banks, money services businesses, securities and commodities brokers/dealers, insurance companies, dealers in precious metals/stones, and their affiliates and subsidiaries (with the standard carve-outs for international financial institutions).

Interaction with Existing Laws and Regulations

The Executive Order specifies that these new measures do not affect the validity of existing general or specific licenses issued under the CACR, and on May 7, OFAC issued General License No. 1 to authorize all transactions prohibited by EO 14404 where such transactions are authorized or exempt under the CACR. General License No. 1, however, does not expand the scope of any authorization or exemption, and any transaction must continue to comply with all relevant conditions and limitations of the license relied upon.

Furthermore the Executive Order’s measures do not displace the applicable restrictions under the CACR which are grounded in the Trading with the Enemy Act of 1917, and which prohibit Cuba-related activity by US persons and their owned and controlled affiliates with certain conditional exceptions.

However, EO 14404 which is grounded on the International Emergency Economic Powers Act, layers new authority for a new Cuba-related sanctions program that is separate from, and in addition to the CACR, to impose blocking sanctions and certain less-than-blocking sanctions against foreign persons, which materially increases sanctions risk for foreign companies, financial institutions and other market participants with direct or indirect exposure to Cuba.

Department of State Designations under EO 14404

The initial designations under EO 14044 were issued by the Department of State on May 7, 2026, including to Grupo de Administracion Empresarial S.A. (GAESA). GAESA is a prominent Cuban military-controlled conglomerate that plays a dominant role in Cuba, controlling 40 percent or more of the island’s economy, according to the State Department’s press release, and operating across a wide range of sectors, including tourism and retail to real estate, financial services, import and export operations, infrastructure and logistics, ports and shipping, among others.

OFAC has emphasized in its official guidance that foreign persons, including foreign financial institutions, transacting with GAESA are subject to sanctions risk, except for wind down activities. OFAC has cautioned, however, that actions to return assets to GAESA (or other party sanctioned under EO 14404) or transfer them to another jurisdiction for potential use by the sanctioned party could expose foreign persons to significant sanctions risk. Additionally, OFAC has encouraged foreign persons who are unable to complete wind down activities before June 5, 2026 to contact OFAC.

Takeaways

EO 14404 represents a significant escalation in the Trump Administration’s Cuba policy, and appears intended to internationalize pressure on the Cuban government by deterring foreign commercial engagement with certain targeted sectors or actors linked to the Cuban government. The Executive Order’s grounds for designation includes both past and present activity involving Cuba.

Of note is that while the Executive Order targets key sectors of the Cuban economy such as energy, metals and mining, it does not expressly target other prominent industries such as tourism and biotechnology, though EO 14404 authorizes the Secretary of Treasury, in consultation with the Secretary of State, to target other sectors. Furthermore, GAESA’s designation will effectively impact foreign companies engaged in business involving the tourism industry and other sectors given GAESA’s widespread presence in Cuba’s economy.

Although the US government has not yet issued any designations pursuant to EO 14404, businesses with Cuba exposure should closely monitor further developments, including future designations under the Executive Order and guidance, and evaluate whether existing compliance frameworks adequately address the expanded sanctions authorities. Additionally, companies with current or past Cuba-related activity should assess their risk of potential designation under the Executive Order and any related wind down and contingency plans.

Foreign financial institutions—including those with limited or no direct US footprint—should ensure they have in place appropriate procedures for screening, conducting enhanced due diligence and escalating Cuba-related transactions, given the new secondary sanctions risks.

Mayer Brown is closely monitoring developments and will continue to publish Legal Updates on significant changes with respect to Cuba. Please contact any of the authors or your usual Mayer Brown contact for further guidance.