On June 4, 2026, the US Department of State announced a new round of designations under Executive Order 14404 (“EO 14404“) targeting five entities and five individuals for being “associated with developing, implementing, and funding the Cuban regime’s violent revolutionary network.” Secretary of State Marco Rubio issued a press statement explaining the purpose of these designations. Concurrent with these designations, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC“) issued a new Cuba-related Frequently Asked Question (“FAQ“) clarifying that non-US parties risk exposure to US secondary sanctions for transacting with entities not identified on the Specially Designated Nationals and Blocked Persons List (“SDN List“) but owned by Grupo de Administración Empresarial S.A. (“GAESA“), the Cuban Ministry of the Interior (“MININT“), or the Cuban Ministry of the Revolutionary Armed Forces (“MINFAR“), including their subsidiaries identified on the Cuba Restricted List (“CRL“). This new guidance from OFAC expands the scope of Cuban parties that may trigger US secondary sanctions risks.
Background
On May 1, 2026, President Trump signed EO 14404, “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy,” which significantly expanded the already comprehensive US sanctions and export controls targeting Cuba. This was done by imposing a modern US secondary sanctions regime targeting Cuba similar to those targeting Iran, Russia, and North Korea. For our coverage of EO 14404 and OFAC’s initial guidance, please see our prior blog post here.
The CRL is a list administered and maintained by the State Department that includes some of Cuba’s government ministries and defense and security enterprises, and targets various sectors of the Cuban economy, including real estate, tourism, retail, and hospitality. Parties subject to Cuban Assets Control Regulations (“CACR,” which include non-US entities owned or controlled by US Persons) are generally prohibited from engaging in direct financial transactions with CRL entities even where OFAC general licenses would otherwise apply. Historically, subsidiaries of listed entities were not treated as restricted unless they are separately identified on the CRL.
The New SDN Designations
The Department of State designated five entities and five individuals pursuant to EO 14404, bringing the total number of designated entities and individuals pursuant to this authority to 27. The five entities include MINFAR; the Cuban Institute of Friendship with the Peoples; Amistur Cuba SA; the Committees for the Defense of the Revolution; and Minera la Victoria SA. The five individuals include the President of Cuba Miguel Diaz-Canel Bermudez; his spouse Lis Cuesta Peraza and her son Manuel Anido Cuesta; Alejandro Castro Espin, the former head of the Cuban intelligence services and son of Raul Modesto Castro Ruz; and Alejandro Castro Espin’s son, Raul Alejandro Castro Calis.
The most consequential of these designations is MINFAR due to the number of MINFAR subsidiaries listed on the CRL. As a result of the designation, MINFAR’s majority holdings and subsidiaries are now blocked, many of which are identified on the CRL. As is the case with other designations, each of these entities and individuals are now listed on OFAC’s SDN List.
FAQ 1258 and Secondary Sanctions Risk Under EO 14404
OFAC In FAQ 1258, OFAC advises that US secondary sanctions risk under EO 14404 extends to transactions with any entity in which GAESA, MININT, or MINFAR own, directly or indirectly, a 50% or greater interest, even if such entities are not identified on the SDN List. This departs from OFAC’s historical approach to this issue under US secondary sanctions, except when Congress has required it (as was the case with respect to US sanctions targeting Russia under the Countering America’s Adversaries Through Sanctions Act, as exemplified through OFAC public guidance such as FAQ 546.)
FAQ 1258 explains that many of the entities listed on the CRL are 50% or more owned by one or more of these entities and therefore present the same secondary sanctions risk under EO 14404. In addition, any non-blocked CRL entity may become the subject of future sanctions actions, so non-US parties transacting with any entity on the CRL may run the risk of themselves being sanctioned by the US government. By contrast, parties subject to the CACR may continue to engage in dealings with EO 14404 SDNs and CRL entities authorized under those OFAC regulations as a result of Cuba General License No. 1.
Practical Considerations
OFAC’s new FAQ 1258 indicates that OFAC is treating entities that are 50% or more owned by an EO 14404 SDN as carrying the same US secondary sanctions risk as the EO 14404 SDN itself, even where the subsidiary is not separately named on the SDN List. Non-US companies and financial institutions accustomed to treating CRL status and SDN status as distinct should take note that such a distinction no longer holds. Non-US parties deciding not to engage in Cuba-related business will need to consider the potential application of blocking measures against the US embargo of Cuba.
