On May 1, 2026, the Trump Administration escalated U.S. sanctions on Cuba by issuing Executive Order (E.O.) 14404, which, in part: (i) provides broad authority to designate parties determined to participate in key sectors of Cuba’s economy; and (ii) authorizes secondary sanctions against Foreign Financial Institutions (FFIs) engaged in certain dealings with parties sanctioned under E.O. 14404. E.O. 14404’s broad scope reflects the U.S. government’s resolve to pressure Cuba to reverse its “malign actions,” as outlined in the Executive Order’s accompanying fact sheet.
Six days later, the U.S. Department of State made the first sanctions designations under the new authority by designating several Cuban entities and individuals as Specially Designated Nationals (SDNs) under E.O. 14404, including Cuban military-owned conglomerate Grupo de Administración Empresarial S.A. (GAESA). The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) concurrently issued General License No. 1 (GL 1) to authorize certain transactions otherwise prohibited by E.O. 14404, and published several clarifying FAQs.
Below, we: (i) briefly summarize the relevant background to E.O. 14404; (ii) discuss key facets of E.O. 14404; and (iii) review the State Department’s May 7 blocking actions and OFAC’s issuance of GL 1; and (iv) highlight practical implications of this new sanctions authority.
E.O. 14404 is the first Cuba sanctions authority issued pursuant to the International Emergency Economic Powers Act (IEEPA). Cuba is already targeted by long-standing comprehensive sanctions, as set out in the Cuban Assets Control Regulations (CACR) issued under the Trading with the Enemy Act (TWEA), prohibiting virtually all U.S. nexus dealings with Cuba unless authorized by OFAC.
The second Trump Administration has steadily increased pressure on the Cuban regime, including by reversing certain policies of the Biden Administration towards Cuba. On January 20, 2025, President Trump signed an Executive Order revoking President Biden’s removal of Cuba from the State Sponsors of Terrorism list. Also in January 2025, the U.S. Department of State re-issued the Cuba Restricted List and added over 200 entities to it. On June 30, 2025, the White House re-issued National Security Presidential Memorandum-5 (NSPM-5), which replicates in large part the 2017 NSPM-5 from President Trump’s first term. The reissued NSPM-5 articulates the United States’ policy towards Cuba, which includes ending economic practices that disproportionately benefit the Cuban government at the expense of the Cuban people.
The Trump Administration has also instituted a series of actions to stem the flow of resources to the Cuban regime, such as by pressuring Venezuela and Mexico to halt oil shipments to Cuba, enforcing Cuban sanctions through naval patrols, and threatening tariffs on imports from countries that sell or supply oil to Cuba. The Trump Administration continues to voice frustration that non-U.S. countries—including China and Russia—still fund and otherwise support the Cuban regime.
E.O. 14404 is implemented pursuant to IEEPA, the statutory authority for almost all U.S. sanctions programs administered by OFAC. Issuing E.O. 14404 under IEEPA provides OFAC with greater flexibility to leverage tools and the related interpretive structure from its other sanctions programs. Like many IEEPA-based Executive Orders, E.O. 14404 sets out a number of designation authorities based on U.S. foreign policy and national security objectives.
E.O. 14404 authorizes both the Secretaries of State and Treasury—each in consultation with the other—to designate any non-U.S. person determined “to operate in or have operated in the energy, defense and related materiel, metals and mining, financial services, or security sector of the Cuban economy.” The Treasury Secretary may also, in consultation with the Secretary of State, authorize the imposition of sanctions with respect to additional sectors of the Cuban economy. OFAC explains in FAQ 1256 that “identification of these sectors exposes [non-U.S.] persons that operate or have operated in such sectors to sanctions risk.”
Sector-based targeting is a familiar tool of U.S. economic sanctions. Like other sector-specific designation authorities, E.O. 14404 authorizes the imposition of sanctions on persons determined to “operate” in certain enumerated economic sectors. As shown by the initial designation under E.O. 14404, we expect that E.O. 14404 will be used to designate both Cuban and non-Cuban companies operating in sectors identified in or subsequently determined pursuant to E.O. 14404. We note, however, that E.O. 14404 carves out activities licensed under the CACR, which means that non-U.S. persons will not be designated pursuant to E.O. 14404 for engaging in activities undertaken with a CACR-related general or specific license. This is consistent with OFAC’s longstanding approach of not sanctioning non-U.S. entities for engaging in conduct that is not prohibited under primary sanctions.
E.O. 14404 authorizes the Secretary of Treasury, in consultation with the Secretary of State, to impose full blocking (i.e., asset-freezing) sanctions and/or restrictions that prohibit the opening of, or prohibit or impose strict conditions on the maintenance of, correspondent accounts or payable-through accounts in the United States (collectively, “correspondent account sanctions”) on any FFI that is determined to have “conducted or facilitated any significant transaction or transactions for or on behalf of any person whose property or interests in property are blocked pursuant to this order.”
“FFI” is broadly defined to mean “any [non-U.S.] entity that is engaged in the business of accepting deposits; making, granting, transferring, holding, or brokering loans or credits; purchasing or selling [non-U.S.] exchange, securities, futures, or options; or procuring purchasers and sellers thereof, as principal or agent.” It includes, inter alia, depository institutions; banks; money services businesses; insurance companies; investment companies; and holding companies, affiliates, or subsidiaries of any of the foregoing.
This secondary sanctions authority is notable for several reasons. First, the scope is broad, authorizing the imposition of secondary sanctions on FFIs for facilitating a “significant” transaction for or on behalf of any person blocked under E.O. 14404. However, E.O. 14404 limits the scope of this broad authority by carving out activities licensed under the CACR.
Second, this authority tracks the secondary sanctions authorized by Russia-related E.O. 14114, issued on December 22, 2023 (see our analysis of that action).[1] Like E.O. 14114—but dissimilar to other secondary sanctions authorities—E.O. 14404 does not target only known transactions with sanctioned parties but instead threatens sanctions against FFIs determined to have conducted or facilitated, whether known or not, any “significant” transaction for or on behalf of persons whose property has been blocked pursuant to E.O. 14404. (OFAC will likely continue to evaluate the significance of any specific transaction under a facts and circumstances analysis, as set out in the context of E.O. 14114 in the factors in FAQ 1151). Although OFAC may consider, when determining whether to impose sanctions, the extent to which an FFI had knowledge (or reason to know) of sanctionable activities, the absence of a knowledge requirement provides OFAC with greater flexibility to make sanctions determinations.
In addition to the sector-related designation authorities, E.O. 14404 authorizes the imposition of blocking sanctions against non-U.S. persons determined to be “responsible for or complicit in, or to have directly or indirectly engaged in or attempted to engage in, serious human rights abuse in Cuba” or “responsible for or complicit in, or to have directly or indirectly engaged or attempted to engage in, 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[.]” E.O. 14404 also authorizes the imposition of blocking sanctions against any individual who is determined to be “an adult family member of a person designated pursuant to this order[.]” This authority represents an expansive status-based targeting authority.
On May 7, 2026, the U.S. Department of State designated its initial targets under E.O. 144014, notably including the Cuban military-controlled entity GAESA among other targets. OFAC advises in FAQ 1254 that it will take a limited non-targeting posture through June 5, 2026, for non-U.S. persons engaged in wind-down transactions with GAESA or any entity in which GAESA owns, directly or indirectly, a 50 percent or greater interest. OFAC cautions, however, that actions to return assets to a sanctioned party or transfer them to another jurisdiction for potential use by the sanctioned party could expose non-U.S. persons to significant sanctions risk. OFAC also reminds the public that GAESA has been designated as an SDN and on the CRL since December 21, 2020, and OFAC’s current non-targeting posture does not authorize any transactions prohibited by the CACR. Therefore, “…persons subject to U.S. jurisdiction continue to be prohibited from engaging in transactions involving GAESA, including in connection with a [non-U.S.] person’s wind down of activities with GAESA, unless separately authorized by OFAC.”
At the same time, OFAC issued GL 1, which authorizes all transactions prohibited by E.O. 14404 “[t]o the extent such transactions are authorized or exempt under the [CACR], including transactions authorized by a general or specific license pursuant to the CACR.” OFAC explains in FAQ 1253 that “GL 1 is intended to ensure activity authorized or exempt under the CACR is not interrupted if a [non-U.S.] person already blocked or otherwise identified under the CACR is also blocked pursuant to E.O. 14404, such as [GAESA]. In such cases, no additional OFAC authorization beyond GL 1 would be required to engage in CACR-authorized activities.” OFAC explains further in the same FAQ that GL 1 does not expand the scope of any authorization or exemption under the CACR and that any “[t]ransactions prohibited by E.O. 14404 require additional OFAC authorization if not authorized or exempt under the CACR.” In other words, the designation under E.O. 14404 of a person that is already blocked under the CACR should not broaden or narrow any exemption or authorization pursuant to the CACR to engage in dealings with that person.
E.O. 14404’s broad expansion of Cuba sanctions authorities to threaten secondary sanctions against non-U.S. financial institutions facilitating significant dealings with Cuba demonstrates the Trump Administration’s focus on Cuba and efforts to find additional leverage against the current Cuban regime. E.O. 14404 presents material sanctions risks for non-U.S. persons that continue to engage in sanctionable conduct.
Non-U.S. companies should consider proactive assessment of potential exposure and consider taking steps to mitigate the risk of being sanctioned. Likewise, U.S. persons that have existing relationships with—or that are pursuing new opportunities with—non-U.S. entities known to engage in conduct that is sanctionable under E.O. 14404 (and that therefore may be likely targets of sanctions), should consider taking steps to mitigate the impact of those potential sanctions.
Given the breadth of new sanctions authorities under E.O. 14404 and the speed with which the U.S. government has already imposed sanctions pursuant to it, we expect non-U.S. companies, including FFIs, may seriously consider de-risking from dealings in and with Cuba.
[1] We note that the United States has yet to sanction an FFI under E.O. 14024, as amended by E.O. 14114, to date.