On May 1, 2026, President Trump signed Executive Order 14404 (“EO 14404”) entitled “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy,” which significantly expands the US sanctions framework targeting Cuba. EO 14404 imposed a modern US secondary sanctions regime targeting Cuba that is likely to encourage many non-US companies – particularly those with US assets/business and/or reliance on the US financial system – to stop or curtail their Cuba-related business.
This measure resembles similar US secondary sanctions targeting Iran, Russia, and North Korea. Non-US companies deciding not to engage in Cuba-related business will need to consider the potential application of blocking measures against the US embargo of Cuba. At the same time, EO 14404 does not affect the US primary embargo implemented under the Cuban Assets Control Regulations (“CACR”) or the Export Administration Regulations.
EO 14404 broadens the existing sanctions on Cuba to include new restrictions under the International Emergency Economic Powers Act, taking “further steps with respect to the national emergency declared in Executive Order 14380 [(“EO 14380″)] of January 29, 2026.” As discussed in our prior blog post, EO 14380 declared a national emergency with respect to Cuba and authorized the United States to impose new tariffs on imports from countries that supply oil to the Government of Cuba. EO 14404 was accompanied by a White House Fact Sheet. On May 7, 2026, the Department of State announced the first designations under EO 14404, and the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued Cuba General License 1 (“Cuba GL 1”) and six new FAQs providing implementing guidance and clarifications.
Sanctionable Conduct Under EO 14404
The EO authorizes the blocking of all property and interests in property (i.e., designation as a Specially Designated National (“SDN”)) of foreign persons determined by the US Government to meet any of the following criteria:
- Operating in or having operated in the energy, defense and related materiel, metals and mining, financial services, or security sector of the Cuban economy, or any other sector of the Cuban economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State;
- Being owned, controlled, or directed by, or having acted or purported to act for or on behalf of, directly or indirectly, the Government of Cuba or any EO 14404 SDN;
- Owning or controlling, directly or indirectly, any EO 14404 SDN;
- Having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of Cuba or any EO 14404 SDN
- Being or having been a leader, official, senior executive officer, or member of the board of directors of the Government of Cuba or an EO 14404 SDN;
- Being a political subdivision, agency, or instrumentality of the Government of Cuba;
- Being responsible for or complicit in, or having directly or indirectly engaged in or attempted to engage in, serious human rights abuse in Cuba;
- Being responsible for or complicit in, or having 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; or
- Being an adult family member of an EO 14404 SDN.
EO 14404’s designation criteria are notably broad. The sectoral prong (#1 above) is open-ended, as the Secretary of the Treasury is authorized to extend coverage to “any other sector” of the Cuban economy beyond the enumerated sectors. Prong #4 targeting parties that have “materially assisted” or “provided financial, material, or technological support” to the Government of Cuba or an EO 14404 SDN also establishes a wide basis for future designations. Prong #3 creates risk for parent companies and shareholders of entities engaging in sanctionable activity under EO 14404, which goes beyond OFAC’s normal “50% Rule” that targets entities 50% or more owned by SDNs but does automatically target shareholders.
At the same time, EO 14404 provides that the prohibitions shall not apply to activities authorized by, and shall not affect the validity of, any license issued pursuant to the CACR administered by OFAC. This means that activities already authorized by existing CACR general or specific licenses should remain permissible even if they involve EO 14404 SDNs, and EO 14404 does not override the CACR’s existing licensing framework. This was confirmed with Cuba GL 1.
Secondary Sanctions Risks for Foreign Financial Institutions
Another feature of EO 14404 is the introduction of US secondary sanctions targeting foreign financial institutions. OFAC is authorized to impose sanctions on a foreign financial institution upon determining that it has conducted or facilitated any significant transaction or transactions for or on behalf of any EO 14404 SDN.
The available sanctions on such foreign financial institutions include:
- Prohibiting the opening of, or prohibiting or imposing strict conditions on the maintenance of, correspondent accounts or payable-through accounts in the United States; and
- Blocking all property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of such foreign financial institution.
This aspect of EO 14404 is likely to make any non-US banks even more wary of engaging in Cuba-related transactions that has already been the case.
First Designations Under EO 14404
Additionally on May 7, 2026, the Department of State announced the first designations under the EO. The two entities designated under EO 14404 were previously listed on the SDN List under the Cuba sanctions program, and persons subject to US jurisdiction remain prohibited from transacting with GAESA absent OFAC authorization. The State Department indicated in a press statement that additional designations can be expected in the following days and weeks, and made good on that threat with additional designations announced on May 18, 2026. In FAQ #1254, OFAC indicated that US secondary sanctions for parties dealing with Grupo de Administración Empresarial S.A. (aka “GAESA”) and entities it owns 50% or more will not take effect until June 5, 2026.
Considerations under Non-US Blocking Statutes
Canada
Canada’s blocking statute, the Foreign Extraterritorial Measures Act, is designed to constrain the type of extraterritorial reach of foreign laws demonstrated in EO 14044. In particular, the 1992 Cuba Order prohibits Canadian corporations from complying with US extraterritorial measures that affect trade and commerce with Cuba and to notify the Attorney General of communications on extraterritorial US measures targeting trade or commerce between Canada and Cuba received from persons in a position to direct or influence the corporation’s policies. EO 14404 underlines the importance of risk assessments for Canadian financial institutions and corporations continuing to do business in Cuba. The Government of Canada continues to send aid to Cuba, but has yet to respond publicly to the designation, which may complicate its tense trading relationship and ongoing USMCA negotiations with the US Government.
EU/UK
The EU’s blocking statute, Regulation (EC) 2271/96 (the “EU Blocking Regulation”), is designed to protect EU operators from the extraterritorial application of certain third-country legislation, including US sanctions measures targeting Cuba. The Annex to the EU Blocking Regulation currently lists the Cuban Liberty and Democratic Solidarity Act of 1996, the Cuban Democracy Act of 1992, and the Cuban Assets Control Regulations (CACR) as extraterritorial measures, prohibiting EU operators from complying with any requirement or prohibition arising from those laws.
However, EO 14404 has not yet been added to the Annex of the EU Blocking Regulation. As a result, the specific prohibitions and protections of the EU Blocking Regulation do not currently extend to EO 14404. The European Commission has the authority to update the Annex to capture additional extraterritorial measures, however, no amendments have been finalized to date.
The UK retained the EU Blocking Regulation following its departure from the EU in January 2020. In line with the EU, the UK has also not yet added EO 14404 to the Annex of the retained EU Blocking Regulation, meaning (as above) the specific protections and prohibitions do not currently extend to EO 14404. It is not currently clear if and when such an update will occur. Against this background, EO 14404 highlights the importance of robust compliance risk assessments for EU and UK companies and financial institutions continuing to do business in or related to Cuba, particularly given the potential tension between US secondary sanctions exposure and EU and UK blocking obligations should the Annex be updated by the EU and/or the UK to include EO 14404 or measures adopted thereunder.
