Cuba’s new sanctions program, and why "we are not a U.S. person" no longer ends the analysis.
Executive Order 14404 adds a correspondent-banking lever that can affect a European company's banking relationship even without a U.S. party to its contract.
Sanctions · 23 Jul 2026
A European company may assess its Cuba trade without a U.S. party in the contract, yet still depend on a bank with U.S. correspondent access. Executive Order 14404, § 4, adds a separate risk at that banking relationship. Section 4 permits Treasury, upon the specified determination, to restrict a foreign financial institution’s U.S. correspondent or payable-through accounts, or block it, for significant transactions for or on behalf of persons blocked under this order.
What happened
E.O. 14380, §§ 1–2, 91 Fed. Reg. 5085, 5085–87 (Feb. 3, 2026), signed January 29, declared a national emergency over Cuba and authorized a tariff system concerning countries selling or otherwise providing oil to Cuba, directly or indirectly. E.O. 14404, signed May 1 and published May 7, built on that emergency and added blocking, a visa bar and correspondent-banking sanctions on foreign financial institutions. OFAC designated Cuban officials and entities in June and July 2026, including the Ministry of Tourism, foreign-trade and maritime-port groups, fuel wholesalers and a Guernsey-registered investment company.
Section 4 reaches beyond banks. The definition in § 7(e) includes insurers, securities brokers and dealers, investment companies, clearing corporations and dealers in precious metals, stones or jewels. It also identifies exclusions for specified international financial institutions. A familiar commercial label is therefore not enough to decide whether a particular entity fits the order's definition.
The authority requires a Treasury determination. Section 4 covers a foreign financial institution determined to have conducted or facilitated a significant transaction for or on behalf of a person whose property is blocked under E.O. 14404. It permits specified account restrictions or blocking; it does not automatically impose sanctions on every bank handling a Cuba-related payment. Check the counterparty’s status and the transaction facts when performance occurs.
The company-side question is how the payment arrangement connects the proposed trade to that bank exposure. Identify the beneficiary and relevant counterparties rather than assuming a contract without a U.S. signatory answers the bank's question. The order's account-restriction authority concerns the financial institution; it should not be described as an automatic blocking rule for every European company trading with Cuba. This distinction matters when deciding what information to give the bank and which U.S. sanctions questions need legal review.
Which license is being relied on
The May order preserved the validity of existing Cuban Assets Control Regulations licenses for authorized activities: § 2(b) addresses the blocking prohibitions and § 4(c) addresses the financial-institution sanctions. That preservation concerns activities the license actually authorizes. It is not a permission to ignore the license's terms or assume that an old authorization remains available after later amendments.
OFAC amended the Cuban Assets Control Regulations, 91 Fed. Reg. 61741 (Sept. 30, 2026), summary and financial/travel amendments, changing payment and travel authorizations. It separately issued the Cuba Sanctions Regulations, 31 C.F.R. part 516, 91 Fed. Reg. 61748 (Sept. 30, 2026), summary. Both rules took effect September 30. This historical account does not establish today's permission for a particular payment, trip or contract.
What this means for you
Map indirect exposure through distributors, subcontractors, freight forwarders and insurers in the relevant sectors, not just direct Cuban counterparties. Ask your bank about the proposed payment on your own terms rather than opening the conversation with an exit letter. These are practical firm observations, not additional duties stated in the order.
For a proposed transaction, bring together the contract, counterparty identity, beneficiary, payment route and the authorization being relied on. Explain what changed since an earlier review, including the September amendments where relevant. Non-U.S. status alone does not answer the bank's separate Section 4 exposure. Nor does the existence of a license answer whether all of its conditions fit the transaction.
You can request a bounded U.S. sanctions review of the exposure and payment arrangement before making a decision. Contact Zimmermann Law to discuss the proposed scope.
This post provides general information, not legal advice. Sanctions analysis is fact-specific and changes over time.
Sources: Exec. Order No. 14404, 91 Fed. Reg. 25061 (May 7, 2026), §§ 2(b), 4, 4(c), 7(e), original `029_2026__eo14404.pdf`, pp. 25062–64; Official PDF. E.O. 14380 §§ 1–2, pp. 5085–87 uses the published govinfo PDF because the main FederalRegister.gov rendition returned Request Access. OFAC Cuba designations June 4, July 13 and July 23, 2026. September 30 published originals: CACR amendments, pp. 61741–48, and Cuba Sanctions Regulations, beginning p. 61748. Orders and regulations are mandatory U.S. federal authority within their scope; list updates evidence the dated designations. Historical May–July account with a September rule note. Retained propositions and native HTML targets checked October 9, 2026; no exhaustive current-law or transaction clearance.
This post is for general information and is not legal advice.
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