Executive Order 14404, signed on May 1, 2026, significantly escalated U.S. sanctions on Cuba by introducing seocndary sanctions risk — exposing non-U.S. persons to potential desgination for their dealings with the sanctioned country. Emboldened by the success of the military operation in Venezuela, Cuba’s primary source of oil, the Trump administration appears to be raising pressure on Havana as the next target in line. Earlier this year, the administration declared a national emergency regarding Cuba and deployed a creative weapon: secondary tariffs threatening duties on goods from countries that sell or supply oil to Cuba. Those tariffs were never actually imposed and became moot when the Supreme Court struck down IEEPA-based tariffs broadly. But the national emergency declaration remained — and it paved the way for the new executive order. Here are three takeaways:
1. Cuba joins Iran and North Korea as countries subject to both a comprehensive embargo and secondary sanctions. However, unlike the secondary sanctions on Iran and North Korea — which rest on congressional statutes such as CISADA and the North Korea Sanctions and Policy Enhancement Act —Cuba’s secondary sanctions rely solely on an exuective order issued under IEEPA authority. This makes them potentially reversible by the next administration with the stroke of a pen, introducing a layer of uncertainty that statutory sanctions do not carry. It is also worth noting that the primary embargo on Cuba, codified in the Helms-Burton Act (the Cuban Liberty and Democratic Solidarity Act of 1996), did not include secondary sanctions authority — in no small part due to fierce EU opposition at the time — deliberately limiting Cuba sanctions to U.S. persons. EO 14404 overrides that design unilaterally, without a new Act of Congress.
2.The most prominent corporate reaction to the EO is that of Canadian miner Sherritt International Corp., which maintained a decades-long presence on the island through Cuban joint ventures in nickel, cobalt, oil, and electricity. Metals and mining is among the sectors specifically targeted in the EO, alongside energy, defense, financial services, and security. Sherritt’s joint venture entity, Moa Nickel S.A., was designated under the EO. What followed was a rapid unraveling: within two weeks, Sherritt suspended operations and repatriated its expatriate employees from Cuba, three board members resigned, the CFO departed, and Deloitte LLP resigned as external auditor with immediate effect — explicitly not due to any accounting disagreement, but almost certainly because continuing to audit a sanctions-adjacent company created unacceptable compliance risk for a firm deeply integrated into the U.S. financial and regulatory system. The Deloitte episode in particular illustrates how secondary sanctions cascade through the entire professional services ecosystem around a business — not just the business itself.
3. The state of Western business in Cuba was already grim before the EO landed. The remaining Western presence is concentrated in hospitality, dominated by Spanish chains such as Meliá and Iberostar. The structural problem is that these companies operate under joint mangement with GAESA — the Cuban miltary’s umbrella conglomerate, controlling an estimated 40% of the Cuban economy including tourism, remittances, logistics, the Port of Mariel, retail, and the country’s main foreign-currency flows. GAESA was first designated on the OFAC SDN List back in December 2020, but that eariler designation operated under the Cuban Assets Control Regulations, which bind only U.S. persons — leaving non-U.S. companies entirely unaffected. What EO 14404 changes is the legal authority under which GAESA is listed: by re-designating it under the new secondary sanctions framework, Washington has for the first time exposed non-U.S. companies transacting with GAESA to potential designation themselves. Given that operating in Cuba’s hard-currency economy without touching GAESA is virtually impossible, this effectively presents Western companies with a binary choice: exit, or face sanctions risk. The chilling effect has already begun.
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