{"id":25505,"date":"2026-05-22T12:32:19","date_gmt":"2026-05-22T11:32:19","guid":{"rendered":"https:\/\/lupicinio.com\/?p=25505"},"modified":"2026-05-22T12:32:19","modified_gmt":"2026-05-22T11:32:19","slug":"usa-reopens-the-cuban-file-sanctions-extraterritoriality-and-risk-for-international-operators","status":"publish","type":"post","link":"https:\/\/lupicinio.com\/en\/usa-reopens-the-cuban-file-sanctions-extraterritoriality-and-risk-for-international-operators\/","title":{"rendered":"USA Reopens the Cuban File: Sanctions, Extraterritoriality and Risk for International Operators"},"content":{"rendered":"

Washington has once again tightened the sanctions regime against the Republic of Cuba through a new Executive Order<\/strong><\/a>, specifically E.O. 14404 <\/strong>(hereinafter the \u2018<\/em>Executive Order\u2019), which broadens the subjective scope of designations, strengthens the financial reach of the measures and, with remarkable clarity, increases the risk of secondary sanctions for non-US third parties.<\/p>\n

The political message is unequivocal and the legal consequence even more significant, as regulatory exposure falls not only on entities with a direct link to the United States, but on any operator maintaining material relations with persons, entities or sectors now covered.<\/p>\n

1. The rationale behind the new Executive Order<\/h2>\n

The Executive Order, approved on 1 May 2026 and authorised under the IEEPA (International Emergency Economic Powers Act), the NEA (National Emergencies Act), the INA (Immigration and Nationality Act) and the United States Code, declares that the policies of the Cuban Government continue to constitute an unusual and extraordinary threat to the national security and foreign policy of the United States. In fact, it is adopted in continuation of the national emergency previously declared by Executive Order 14380<\/a> of 29 January 2026, concerning \u2018threats to the United States Government by the Government of Cuba\u2019, and represents one of the most significant developments in US policy towards Cuba since the activation of Title III of the Helms-Burton Act in 2019.<\/p>\n

On this basis, Washington, in addition to freezing assets or restricting travel, has established a regime covering activities in specific economic sectors such as energy and defence, material support for the Government of Cuba or any person whose property or financial interests are blocked under these regulations, as well as the structures controlling such property and financial interests; and, more generally, the inclusion of acts of corruption, serious human rights violations and links to the Cuban government apparatus.<\/p>\n

Consequently, this entails a broadening of the scope of sanctions and an intensification of scrutiny over any transaction involving a direct or indirect Cuban presence.<\/p>\n

2. What exactly is sanctioned?<\/h2>\n

The Executive Order freezes all property and financial interests in the United States belonging to foreign persons who, as jointly determined by the Secretary of State and the Secretary of the Treasury, meet the criteria set out, prohibiting the transfer, payment, export, withdrawal or any other form of dealing in such assets.<\/p>\n

The designation criteria include operating, or having operated\u2014that is, even if the conduct took place in the past\u2014in the energy, defence and related materials, metals and mining, financial services, security sectors, or in any other sector that the Secretary of the Treasury, in consultation with the Secretary of State, may determine in the future. In relation to this point, it is necessary to highlight that, whilst the Executive Order does not formally specify full retroactive effect, it does state that the prohibitions shall apply without prejudice to any contract entered into or any licence or permit granted prior to the date of the Executive Order, with the exception of those activities expressly authorised by a licence issued in accordance with the Code of Federal Regulations (CFR).<\/p>\n

Also included are those \u2013 natural and legal persons \u2013 who are controlled by the Government of Cuba, those who provide it with material assistance, financing, goods or services, those who are or have been leaders or officials of the Government itself, its subdivisions or state instrumentalities, and those responsible for serious human rights abuses or corruption linked to Cuba (i.e. embezzlement of public assets, the expropriation of private assets for personal gain or political purposes, or bribery).<\/p>\n

The inclusion of adult family members of designated persons is a particularly sensitive issue, as it extends the legal and reputational harm beyond the principal subject. From a legal perspective, this approach raises significant questions regarding proportionality, due process and individual responsibility, whilst also granting the authorities a scope for action with wide margins of administrative discretion.<\/p>\n

3. Primary and secondary sanctions<\/h2>\n

The distinction between primary and secondary sanctions is essential here.<\/p>\n

Primary sanctions apply to persons and activities that are broadly considered to be subject to US jurisdiction, and immediately affect assets, property, transactions and conduct linked to the United States, such as those outlined above.<\/p>\n

Secondary sanctions, on the other hand, extend the risk to foreign nationals not linked to the United States. In this regard, the Executive Order also authorises the imposition of sanctions on foreign financial institutions that have carried out or facilitated significant transactions directed at persons designated under the criteria set out in the regulation.<\/p>\n

These measures result in the freezing of correspondent accounts in the United States and the freezing of the foreign financial institution\u2019s own assets if it holds assets under US control.<\/p>\n

Therefore, in this context, a European or foreign company or financial institution with no links to the United States (with particular relevance to Spain, given the significant economic and commercial activity it maintains on the island) must carry out the necessary analysis to assess the legality of the transaction in accordance with its own jurisdiction, with a view to also incorporating a detailed evaluation of any possible connections, including indirect ones, with the US sanctions regime applicable to Cuba.<\/p>\n

4. Implications for banks and businesses<\/h2>\n

In banking, the most immediate effect will be a tightening of compliance<\/em> regulations, including increased screening, more alerts regarding beneficial ownership and KYC procedures, greater caution in cross-border payments, and lower tolerance for correspondent banking risks involving transactions linked to Cuba.<\/p>\n

In trade and investment, the measure may block financing, insurance, collections, deliveries and ancillary services when a counterparty, logistics partner or financier falls foul of the new sanctions regime.<\/p>\n

In sectors such as energy, mining, defence, financial services and security, the text is particularly severe, as the US Government itself identifies these areas as particularly sensitive.<\/p>\n

Finally, for Spanish groups, the practical problem will centre on supply contracts, joint ventures, distribution structures and transactions with banks that cannot accept the risk of being exposed to secondary sanctions.<\/p>\n

Notwithstanding the above, it is expected that OFAC will, over the coming months, issue further FAQs, interpretative guidelines and specific designations aimed at clarifying the operational scope\u2014which has so far been broad\u2014of the Executive Order.<\/p>\n

5. Key points for Spanish operators<\/h2>\n

The first priority is to review the full traceability of each transaction, including the counterparty, ultimate beneficiary, payment channel, intermediary bank, insurer, intermediaries and the actual destination of goods or services.<\/p>\n

The second is to strengthen the sanctions clauses in international contracts, incorporating representations, warranties, notification obligations, rights of suspension and termination, and mechanisms for substituting means of payment.<\/p>\n

The third is to review corporate and control structures to detect whether there is a material link with potentially designated persons, entities or sectors.<\/p>\n

In this regard, due diligence cannot be merely documentary and formalistic; it must be substantive and economic, as the Executive Order focuses on the reality of control, support and benefit.<\/p>\n

6. Theoretical framework<\/h2>\n

It is advisable to start from a strict notion of international sanctions, as Jos\u00e9 Luis Iriarte points out in his article \u2018<\/em>Las sanciones internacionales y su incidencia en las operaciones transnacionales de comercio e inversi\u00f3n. Especial referencia a las restricciones impuestas por la Uni\u00f3n Europea\u2019<\/em><\/a>, in which he analyses how international restrictive measures can directly affect the execution, financing and legal viability of transnational trade and investment operations. <\/em>This approach allows for a clear distinction to be made between asset freezes, trade bans, sectoral restrictions, entry bans and financial measures with an indirect scope.<\/p>\n

This conceptual precision is particularly significant in the current context of the expansion and sophistication of sanctions regimes, which includes the Executive Order analysed here; as we have seen, this reinforces the freezing and restriction mechanisms applicable to certain persons, entities and transactions related to Cuba. This regulatory evolution has broadened the scope of sanctions and their extraterritorial effects, particularly through the US financial system and the use of the dollar in international transactions.<\/p>\n

Furthermore, as can be seen, modern sanctions go beyond the mere freezing of assets and have significant reputational and financial consequences that encourage over-compliance. As a result, numerous financial institutions, insurers and international operators apply more restrictive internal criteria to reduce regulatory risks, which can lead to account closures, rejected transactions, logistical disruptions or financing restrictions, even in legally permitted activities.<\/p>\n

7. Strategic analysis and conclusions<\/h2>\n

This Executive Order, like many other US sanctions regulations, is characterised by a high degree of subjectivity, sectoral flexibility and the ability to affect third parties.<\/p>\n

This forces European companies to think in terms of geopolitical risk rather than just local legality, because the problem is no longer simply one of \u2018compliance or non-compliance\u2019, but of being shut out of the market due to the reluctance of banks, insurers or business partners.<\/p>\n

That said, the Executive Order consolidates a form of pressure that resembles less a closed list and more an economic containment network with a drive for expansion.<\/p>\n

For those doing business with Cuba, the question is no longer whether the sanction affects them today, but which part of their value chain might fall within the scope of a designated entity tomorrow.<\/p>\n

With the collaboration of Jos\u00e9 Luis Iriarte, Professor of Private International Law at the Universidad P\u00fablica de Navarra.<\/strong><\/em><\/p>\n

 <\/p>\n

******<\/p>\n

More information:<\/p>\n

Lupicinio International Law Firm<\/strong><\/span>
\nC\/ Villanueva 29
\n28001 Madrid
\nP: +34 91 436 00 90<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

Washington has once again tightened the sanctions regime against the Republic of Cuba through a new Executive Order, specifically E.O. 14404 (hereinafter the \u2018Executive Order\u2019), which broadens the subjective scope of designations, strengthens the financial reach of the measures and, with remarkable clarity, increases the risk of secondary sanctions for non-US third parties. 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