New Cuba Sanctions, OFAC Targets Iranian Shadow Banking and Chinese Oil Terminal

President Donald Trump declared that the Iran war has been "terminated" and sanctions are back. On May 1, 2026, the president issued a new executive order (EO) authorizing the imposition of new Cuba sanctions, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated multiple Iranian exchange houses, and the U.S. Department of State targeted a network facilitating Iran's illicit oil trade, including a Chinese terminal operator. Our quick take:

Cuba

The new EO authorizes sanctions on broad swaths of Cuba's economy and threatens the imposition of secondary sanctions on foreign financial institutions (FFIs) that engage with blocked entities. Critically:

• Sectoral Sanctions. The EO authorizes the imposition of sanctions on foreign persons determined to operate or have operated in the energy, defense and related material, metals and mining, financial services or security sectors, as well as other sectors as determined by the Treasury Secretary, in consultation with the Secretary of State. No persons have been designated to date, and the departments retain discretion over future targets.
• Secondary Sanctions for FFIs. The EO authorizes secondary sanctions on FFIs determined to have conducted or facilitated significant transactions with persons blocked pursuant to the order.
• Other Designation Criteria. The EO authorizes the imposition of sanctions on Cuban government entities and officials, those in leadership and board positions of blocked entities, as well as persons who have engaged in serious human rights abuse or corruption in or related to Cuba.

The new sanctions replace secondary tariffs threatened earlier in 2026 and magnify the risks for foreign companies and banks active in Cuba. Companies and financial institutions with any direct or indirect exposure to Cuba – including those that may process transactions for entities operating in the Cuban energy, defense, metals and mining, financial services or security sectors – should promptly review their compliance programs in light of the Cuba EO and consider the risks that their specific operations or activities involving Cuba may raise (including how any new sanctions intersect with activities already licensed under the Cuban Asset Control Regulations).

Iran

OFAC designated three Iranian foreign currency exchanges and their associated front companies as part of the Treasury Department's ongoing efforts to disrupt the Iranian regime's financial lifelines. Iranian exchange houses facilitate billions of dollars in foreign currency transactions each year. Because Iran primarily settles its oil sales in Chinese yuan, these entities play a critical role in converting oil revenues into currencies that are more readily useable by Iranian forces. This action follows OFAC's targeting of an illicit Iranian oil smuggling network on April 15, 2026.

Concurrent with this action, the State Department sanctioned multiple entities, an individual and a vessel involved in the trade of Iranian petroleum and petroleum products. This action targets a China-based petroleum terminal operator that has imported tens of millions of barrels of sanctioned Iranian crude oil since the start of the Trump Administration. On April 24, 2026, OFAC sanctioned another independent oil refinery in China (known as "teapot" refineries), along with approximately 40 shipping firms and vessels that operate as part of Iran's shadow fleet. OFAC alerted financial institutions to the risks of dealing with China's teapot refineries.

Additional Information

Attorneys in Holland & Knight's International Trade Group continue to monitor developments and will issue further analysis.