New Cuba Executive Order Creates an IEEPA-Based Sanctions Program and Secondary Sanctions Risk

On May 1, 2026, President Trump issued Executive Order (EO) 14404, “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy,” authorizing sanctions against persons determined to be operating in a variety of sectors of the Cuban economy, with significant impacts to non-U.S. financial institutions who process related transactions. In practical terms, the order gives the U.S. government a new designation authority for foreign persons connected to specified Cuba-related activity and creates a secondary sanctions risk for foreign financial institutions that facilitate significant transactions involving persons blocked under the order.

Background
EO 14404 follows a series of Cuba-related actions since the beginning of the second Trump administration. In June 2025, President Trump reissued and amended National Security Presidential Memorandum 5 (NSPM-5). NSPM-5 directs the Executive Branch to channel funds toward the Cuban people and away from the Cuban regime, and identifies as policy objectives: improving human rights, encouraging the rule of law, fostering free markets and free enterprise, and promoting democracy in Cuba. Following this, President Trump issued Executive Order 14380 on January 29, 2026, declaring a national emergency after finding that the policies, practices and actions of the Government of Cuba constitute an unusual and extraordinary threat to U.S. national security and foreign policy. EO 14380 initially addressed that emergency by establishing a tariff system targeting imports of goods from foreign countries that directly or indirectly sell or otherwise provide oil to Cuba. EO 14404 takes “additional steps” with respect to that same national emergency by authorizing blocking sanctions and certain sanctions on foreign financial institutions. A noteworthy aspect of the EO is that it is issued under the authority of the International Emergency Economic Powers Act (IEEPA) rather than the Trading with the Enemy Act (TWEA), which has been the longstanding statutory basis for Cuba-related sanctions.

Scope of EO 14404
The CACR, codified at 31 C.F.R. Part 515, generally prohibits persons subject to U.S. jurisdiction from engaging in transactions involving property in which Cuba or a Cuban national has an interest, unless authorized or exempt. By contrast, EO 14404 establishes a new Cuba-related sanctions program under IEEPA that is separate from, and in addition to, the CACR. Per General License 1, if an authorization is provided already under the CACR, it is not necessary for it to be separately provided under EO 14044.

EO 14404 authorizes blocking sanctions on foreign persons that operate, or have operated, in key sectors of the Cuban economy, including energy, defense and related materiel, metals and mining, financial services, and security, as well as any additional sectors designated by the Treasury Secretary in consultation with the Secretary of State.

It also targets conduct involving serious human rights abuses or corruption related to Cuba. The order further applies to certain Cuban government officials and to senior executives and board members of blocked entities, and in some cases extends consequences to their adult family members.

Sanctions Impact
On May 7, 2026, the Department of State announced designations under EO 14404 targeting Grupo de Administración Empresarial S.A. (GAESA), for operating or having operated in the financial services sector of the Cuban economy; Ania Guillermina Lastres Morera for being or having been a leader, official, senior executive officer, or board member of GAESA; and Moa Nickel S.A. for operating or having operated in the metals and mining sector of the Cuban economy. Moa Nickel is a 50/50 joint venture between Canada’s Sherritt International and Cuba’s General Nickel Company, and has since suspended operations.

Of note, in its May 7 announcement, the State Department stated that foreign persons engaging in transactions with persons designated under EO 14404, or operating in the Cuban energy, defense and related materiel, metals and mining, financial services, or security sectors, are themselves at risk of sanctions. The Department further warned that non-U.S. persons, including foreign financial institutions, should “proceed with caution” in dealings with parties sanctioned under the authority, and that returning assets to a sanctioned party or transferring assets to another jurisdiction for potential use by the target could expose non-U.S. persons to significant sanctions risk.

This approach closely resembles the sanctions architecture added to the Russia program by Executive Order 14114. EO 14114 authorized sanctions on foreign financial institutions that conduct or facilitate significant transactions involving Russia’s military-industrial base, including certain transactions for persons designated for operating in specified sectors of the Russian Federation economy. OFAC has issued guidance for foreign financial institutions navigating these scenarios, defining key terms and offering insight into potential mitigation options.

Moving forward, it is important for companies navigating business in Cuba to understand the potential additional sanctions risks created by these new measures. Additional updates are anticipated in the near term.