The U.S. has taken a tougher stance on Cuba with the issue of Executive Order 14404 on May 1, 2026. For shipping interests, this is an important shift because it introduces potential exposure for non-US operators.
What’s changed?
Until recently, US sanctions on Cuba mainly affected US persons. Foreign companies could still trade with Cuba, subject to certain limits (e.g. the 180-day rule), without broad secondary sanctions risk.
E.O. 14404 changes that. It allows the US to sanction parties operating in key Cuban sectors, including: (i) energy; (ii) metals and mining; (iii) financial services; and (iv) defence and security. It also covers anyone providing “material assistance” to those parties.
Why this matters for shipping
This brings Cuba closer to sanctions regimes used for Russia, Iran and Venezuela – where non-US shipping interests can face risk. While not automatic, the risk of a sanctions violation is very much increased. Operating in these sectors may attract US scrutiny. Dealing with designated parties could lead to sanctions exposure. Indeed, supporting a sanctioned entity (directly or indirectly) may be enough to amount to non-compliance.
Early designations
OFAC has already designated several entities, including GAESA (financial sector) and MOA Nickel SA (metals and mining). Both have historically appeared in Cuba-related trades, making this directly relevant for owners and charterers.
What hasn’t changed
Not everyone in these sectors is automatically sanctioned. Existing exemptions under US Cuba regulations still apply via General License 1. However, the overall risk profile has increased.
Practical takeaways
Going forward, Members should screen all counterparties and carefully identify the ownership interests they are dealing with. It is also imperative to check whether cargo or trade touches the listed sectors. As always, Members must remain alert to indirect exposure, especially through charterers, receivers, or intermediaries.
A key challenge is that US guidance on what exactly falls within these sectors is still limited, which adds uncertainty. Some basic FAQs have been published by the government, which can be found here: Frequently Asked Questions – Newly Added | Office of Foreign Assets Control.
In short, Cuba trades are no longer low risk for non-US shipping interests. While sanctions are not automatic, the possibility of designation or being caught by “material assistance” rules means greater caution is needed. Further developments and designations are expected. The Club will continue to monitor developments and provide updates accordingly.
The above is for general, informational purposes only and does not constitute legal advice. Members requiring further information should reach out to their usual contact at the Club. Specific legal advice should be sought by Members to clarify how the sanctions may impact their business.
