On May 1, President Trump issued Executive Order 14404, “Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy” (the “Order”), authorizing the imposition of sanctions against non-U.S. companies that engage in a wide range of business with Cuba, significantly raising the sanctions risk of ongoing Cuba-related business.

Although the Order does not significantly affect U.S. companies, which for decades have been required to comply with the U.S. embargo, it does significantly impact non-U.S. companies that, until now, have been able to do business in or with Cuba while separately maintaining their business in or with the United States. As subsequent guidance from the Trump Administration reflects, those companies may face pressure to wind down their business in Cuba or risk significant consequences under the U.S. sanctions law.

Background on Recent Cuba Sanctions Actions

The Order follows Executive Order 14380, “Addressing Threats to the United States by the Government of Cuba,” which President Trump issued on January 29, 2026. That order declared a national emergency with respect to the policies, practices, and actions of the Government of Cuba and purported to impose, pursuant to the International Emergency Economic Powers Act (“IEEPA”), import duties on goods produced by countries supplying oil to Cuba.

U.S. sanctions against Cuba have, for decades, relied on a number of non-IEEPA statutory authorities, especially the Trading With the Enemy Act (“TWEA”). Such existing sanctions primarily target the Government of Cuba itself and Cuban nationals but not third-country (non-U.S., non-Cuban) companies. As discussed in this alert, the IEEPA-based sanctions under the Order expose third-country companies doing business with Cuba to the risk of U.S. sanctions measures, including the blocking (or “freezing”) of property under U.S. jurisdiction. The design of the Order appears to be, at a minimum, to force such companies to make difficult decisions weighing the benefits of Cuba-related business against the threat of U.S. sanctions.

On May 7, 2026, the Secretary of State designated GAESA, MOA NICKEL SA, and Ania Guillermina Lastres Morera under the new May 1 Executive Order. These are the first designations under the new Order. The State Department’s press release stated that “[a]dditional designations can be expected in the following days and weeks.”

On the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued six new frequently asked questions (FAQs). Among them is FAQ #1254, which states that the United States “does not intend to target” those winding down their business with GAESA through June 5, 2026. The FAQ states that returning or making available assets to a sanctioned party “could expose non-U.S. persons to significant sanctions risk.” OFAC encourages those engaged in business dealings with GAESA or its subsidiaries that cannot wind down their business by June 5 to contact OFAC.

These initial designations demonstrate that the top priority for designations is Cuban entities. However, the inclusion of a Cuban joint venture with a Canadian company demonstrates the Trump Administration’s willingness to use sanctions against the interests of allied country companies.

Although the President issued the Order pursuant to IEEPA, the Order does refer to the Cuban Assets Control Regulations (“CACR”), part 515 of Title 31 of the Code of Federal Regulations. It appears to reflect an intent that the Order’s prohibitions “shall not apply to activities authorized by, and shall not affect the validity of,” licenses issued pursuant to the CACR. This unusual interplay between the Order and the CACR, which contains a number of highly technical general licenses, will demand close analysis. On May 7, 2026, OFAC issued General License No. 1 under the Order, authorizing transactions otherwise prohibited by the Order “to the extent such transactions are authorized or exempt” under the CACR. As OFAC explained in FAQ #1253, an authorization under the CACR that applies to dealings with a blocked foreign person under the CACR—such as GAESA—does not require additional authorization beyond General License No. 1.

Who Is Now at Risk

The Order authorizes the Secretary of State or the Secretary of the Treasury to impose blocking sanctions against any foreign 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, or any other sector of the Cuban economy as the Secretary of the Treasury may determine;
• Be owned, controlled, or directed by, or to have acted or purported to act for or on behalf of, directly or indirectly, the Government of Cuba or any person whose property or interests in property are blocked pursuant to the Order;
• Own or control, directly or indirectly, any person whose property or interests in property are blocked pursuant to the Order;
• Have 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 person whose property or interests in property are blocked pursuant to the Order;
• Be or have been a leader, official, senior executive officer, or member of the board of directors of the Government of Cuba or an entity whose property or interests in property are blocked pursuant to the Order;
• Be a political subdivision, agency, or instrumentality of the Government of Cuba;
• 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;
• Be 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; or
• Be an adult family member of a person designated pursuant to the Order.

The Order deploys a broad range of designation criteria, from sector-based designations and designations of adult family members, comparable to (and frequently relied on) criteria used in U.S. sanctions against Russia, to criteria based on serious human rights abuse and public corruption, comparable to those used in the Global Magnitsky sanctions program.

Existing sanctions authorities include designation criteria comparable to the “material assistance” criteria in the Order, and successive administrations have routinely relied on these authorities to target those engaged in the purchase or sale of goods and services with sanctioned persons. Accordingly, the authority to designate those who have materially assisted the Government of Cuba is particularly threatening to companies that engage in even ordinary commercial business with state-owned enterprises in Cuba.

Expanded Secondary Sanctions Exposure

The Order expands secondary sanctions by authorizing the Secretary of the Treasury to impose so-called CAPTA sanctions, which prohibit the opening of, or impose strict conditions on the maintenance of, U.S. correspondent and payable-through accounts for foreign financial institutions that facilitate significant transactions for or on behalf of persons designated under the Order. The Order also authorizes the imposition of blocking sanctions against such foreign financial institutions. Non‑U.S. financial institutions should closely monitor future designations under the Order and consider the U.S. legal implications of transactions involving designated persons, even when such transactions occur entirely outside the United States.

Why This Matters Now

The Order appears intended to discourage continued international business in or with Cuba and to create additional leverage by the United States over the Government of Cuba. Under IEEPA, the U.S. government may impose sanctions against a person without providing advance notice. Depending on the circumstances, OFAC may allow non-U.S. entities to wind down their business before imposing sanctions, as indicated in FAQ #1254. But non-U.S. financial institutions and companies should not assume that they will have an opportunity to unwind their business before sanctions are imposed.

In addition to the sanctions risks created by the Order, non-U.S. enterprises remain subject to potential civil liability in U.S. courts under Title III of the Helms-Burton Act, which provides a private right of action for claims arising from trafficking in property confiscated by the Cuban government following the Cuban revolution. The recent IEEPA-based measures targeting non-U.S. persons engaged in Cuba-related business are not included among the U.S. laws and actions covered by the European Union’s blocking statute, Council Regulation (EC) No. 2271/96, creating potential additional compliance tension for European Union operators.

What Companies Should Consider

Given the breadth of the new designation authorities, companies and financial institutions with any direct or indirect Cuba exposure should consider:

• Reviewing historical and current Cuba‑related activities, including legacy operations;
• Assessing customers, distributors, joint venture partners, and end users for any potential nexus to Cuba or the Government of Cuba; and
• Monitoring any further guidance from the Department of State or the Department of the Treasury that addresses the implementation of the Order.

Any company with current business in or with Cuba should carefully consider the risk that it could become subject to U.S. sanctions under the Order and, likewise, the potential implications of its Cuban relationships. Enterprises that do business with others that, in turn, do business in Cuba should likewise consider the risks associated with those relationships.

Next Steps

WilmerHale has extensive experience advising clients on the risks associated with these types of U.S. sanctions measures. Please reach out to a member of our team if you would like to discuss how to assess and mitigate such risk, or how this Order may impact other aspects of your business or industry.