OFAC Issues New Cuba Sanctions Program and Amends the CACR

The U.S. has for decades imposed a broad embargo on Cuba, anchored principally by the sanctions administered and enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) and export controls administered and enforced by the U.S. Department of the Commerce's Bureau of Industry and Security (BIS). This regulatory framework has been shaped by numerous legislative and regulatory developments, including the Helms-Burton Act (formally known as the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996) and restrictions that have ebbed and flowed depending on the U.S. administration.

Officially, U.S. policy toward Cuba, reflected in the Helms-Burton Act, is to apply pressure to Cuba's government and cause a "transition from a communist totalitarian dictatorship to representative democracy." 22 U.S.C. Section 6065(b)(1). Though this has been U.S. policy for years, different presidential administrations have pursued it with varying levels of enthusiasm for the long-standing economic sanctions. Under the second Trump Administration, Cuba has become a priority, and the administration has dramatically increased economic and other forms of pressure on the island.

The second Trump Administration's approach to the use of economic restrictions on Cuba became clear early in its tenure. On June 30, 2025, President Donald Trump signed the National Security Presidential Memorandum (NSPM-5), directing the rollback of certain Obama- and Biden-era Cuba engagement policies and the tightening of various CACR authorizations.¹ (For more information, see Holland & Knight's previous alerts, "U.S. Announces Steps to Ease Cuba Sanctions," January 15, 2025, and "Trump Administration Rescinds Certain Actions by the Previous Administration to Ease Cuba Sanctions," January 23, 2025.)

On May 1, 2026, President Trump signed Executive Order (EO) 14404, "Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy,"² under the International Emergency Economic Powers Act (IEEPA), taking further steps under the national emergency declared in EO 14380 of January 29, 2026.³ EO 14404 authorizes blocking sanctions against a broad range of targets and secondary sanctions on foreign financial institutions (FFIs). Pursuant to EO 14404, several Cuban and other non-U.S. entities and individuals have been added to OFAC's Special Designated Nationals and Blocked Persons List (SDN List) since May 2026.

On September 29, 2026, OFAC announced the publication of the Cuba Sanctions Regulations (CSR) at 31 C.F.R. Part 516, new regulations to implement EO 14404 of May 1, 2026. OFAC also amended the existing CACR. Both the CSR and the CACR amendments implement many of the regulatory changes that have transpired since the administration articulated its Cuba strategy in the NSPM-5. The CSR are separate from and operate independently of the CACR.

OFAC has amended the CACR by expanding the Cuba Restricted List (CRL) prohibition to cover indirect financial transactions with CRL-listed persons, eliminating the "U-turn" general license (GL), removing the authorization for Cuban entrepreneur bank accounts and narrowing several travel-related GLs.

These actions mark the most significant expansion and restructuring of U.S.-Cuba sanctions in recent years. Both the new CSR and amendments to the CACR took effect on September 30, 2026.

The Cuba Sanctions Regulations

The CSR establish a new Cuba sanctions program to implement EO 14404 that is "separate from, and independent of," the CACR.⁴ However, EO 14404 has a carve-out indicating that its prohibitions "shall not apply to activities authorized by, and shall not affect the validity of, any license issued pursuant to" the CACR. On May 7, 2026, OFAC further clarified the EO's carve-out with a broad Cuba-related GL 1, authorizing all transactions prohibited by EO 14404 to the extent that they are authorized or exempt under the CACR. (For more information, see Holland & Knight's previous alert, "New IEEPA Executive Order Expands Cuba Sanctions Risks," May 13, 2026.) The authorizations under GL 1 and related OFAC FAQs remain in place.

This complex regulatory regime may create uncertainty for parties seeking to rely on longstanding CACR authorizations. For example, on October 7, 2026, Homeland Security Investigations (HSI) Miami, together with U.S. Customs and Border Protection (CBP) and BIS, announced the seizure of 90 biodiesel shipments bound for Cuba destined for Enetec S.A., a Cuban state importing agency designated under EO 14404. The seizures were reportedly based on suspected violations of U.S. sanctions and export controls, notwithstanding public statements from the exporters that the fuel was destined for licensed private-sector end users in Cuba as authorized by the CACR.

Section 516.201 of the CSR prohibits all transactions prohibited by EO 14404 or any further EOs issued under the national emergency declared in EO 14380. Section 2 of EO 14404 authorizes blocking sanctions against foreign persons determined by the U.S. Department of State, in consultation with the Treasury Department Secretary or vice versa to:

• operate in or have operated in the energy, defense and related materiel, metals and mining, financial services or security sectors of the Cuban economy, or in any other sector of the Cuban economy, as may be determined by the Treasury Secretary, in consultation with the Secretary of State
• are owned, controlled or directed by, or acting or purporting 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 EO 14404
• own or control, directly or indirectly, any person whose property or interests in property are blocked under EO 14404
• 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 under EO 14404
• are 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 EO 14404
• are political subdivisions, agencies or instrumentalities of the government of Cuba
• are responsible for or complicit in or to have directly or indirectly engaged in or attempted to engage in serious human rights abuse in Cuba
• are 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
• are adult family members of persons designated under EO 14404

Designations pursuant to EO 14404 result in the blocking of all property and interests in property of the designated person that are in or that hereafter come within the U.S. or that come into the possession or control of U.S. persons, such that it may not be transferred, paid, exported, withdrawn or otherwise dealt in. Under Section 516.406, OFAC's "50 Percent Rule" applies, meaning that any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons itself becomes blocked as well, even if not separately listed on OFAC's SDN List.⁵

Section 4 of EO 14404 separately authorizes the Treasury Department, in consultation with the State Department, to impose sanctions on FFIs that have conducted or facilitated any "significant" transaction(s) for or on behalf of any person whose property or interests in property are blocked under EO 14404. EO 14404 does not define "significant." However, in other sanctions programs, OFAC has applied a totality-of-the-facts-and-circumstances test that may consider the size, number and frequency of transactions, their nature, management awareness and pattern of conduct, nexus to sanctioned persons, deceptive practices, impact on U.S. national security objectives and other relevant factors.⁶ Sanctions on targeted FFIs can include one or more of the following:

• a prohibition on the opening of, or a prohibition or imposition of strict conditions on the FFI's maintenance of, U.S. correspondent or payable-through accounts, and/or
• the blocking of all property and interests in property of the FFI that are in, or hereafter come within, the U.S. or come into the possession or control of U.S. persons, such that it may not be transferred, paid, exported, withdrawn or otherwise dealt in, including a prohibition on making any contribution or provision of funds, goods or services by, to or for the benefit of the blocked FFI, and on receiving any contribution or provision of funds, goods or services from it

FFIs subject to such sanctions will either be added to OFAC's SDNs List or OFAC's list of FFIs subject to correspondent account or payable-through account sanctions (CAPTA List), and U.S. financial institutions will have 10 days to close any affected accounts. The definition of "foreign financial institution" under EO 14404 is broad and extends beyond banks to include money services businesses, insurers, broker-dealers, investment companies, precious metal dealers, and holding companies and their affiliates. Consistent with EO 14404's CACR carve-out, these sanctions do not apply to activities authorized by and do not affect the validity of any license issued under the CACR.

General Licenses

The CSR include a limited set of standard OFAC authorizations for certain transactions that would otherwise be prohibited under Section 516.201, including:

• certain legal services to or on behalf of blocked persons (Section 516.506)
• payment of fees from non-U.S. funds, subject to a 10-year recordkeeping requirement (Section 516.507)
• emergency medical services (Section 516.508)
• official U.S. government business (Section 516.509)
• official business of certain international organizations, including the United Nations, International Centre for Settlement of Investment Disputes, Multilateral Investment Guarantee Agency, regional development banks, the International Committee of the Red Cross/International Federation of Red Cross and Red Crescent Societies, Global Fund and Gavi, the Vaccine Alliance (Section 516.510)
• non-governmental organization (NGO) humanitarian, democracy, education, development, environmental and peacebuilding activities benefitting Cuban civilians (Section 516.511)
• agricultural commodities, medicine and medical devices for personal, noncommercial use for blocked individuals (Section 516.512)
• a 10-day authorization to close correspondent or payable-through accounts for CAPTA-Listed FFIs, with a requirement to report account closure to OFAC within 30 days to OFACReport@treasury.gov (Section 516.513)

Amendments to the CACR

OFAC also amended the CACR for the first time since May 29, 2024, to implement the Cuba-related policy directives articulated in NSPM-5.

CRL: Indirect Financial Transactions and Anti-Evasion

One of the most consequential CACR amendments expands the scope of the CRL prohibition at Section 515.209. Previously, Section 515.209 prohibited only direct financial transactions with CRL-listed entities and a note expressly stated that indirect transactions (including processing a funds transfer where a CRL entity is an intermediary) were not prohibited.⁷

A direct financial transaction under the CACR is a transaction such as a wire transfer, credit card transaction, check or cash payment where the person subject to U.S. jurisdiction acts as the originator to a CRL entity as the ultimate beneficiary or is the ultimate beneficiary of a CRL entity acting as the originator. In other words, a direct financial transaction requires a CRL entity on one end of the payment and a U.S. person on the other. Examples include a 1) U.S. traveler on a family visit paying a CRL hotel, 2) U.S. church renting space from a CRL real estate company or 3) professional-research traveler paying a CRL hotel through a non-U.S. travel agency – a direct transaction notwithstanding the non-U.S. intermediary because the U.S. person originates the funds and the CRL hotel is the ultimate beneficiary.

Now, Section 515.209 will prohibit both direct and indirect⁸ financial transactions with CRL entities. An indirect financial transaction under the CACR is a transaction where the person subject to U.S. jurisdiction – typically a U.S. bank – acts as an intermediary in a transfer of funds that either originates from a CRL entity or has a CRL entity as its ultimate beneficiary, even though neither the originator nor the beneficiary on the other end is subject to U.S. jurisdiction. Examples include a 1) U.S. correspondent bank routing a payment from a CRL-listed Cuban beverage manufacturer to a non-U.S. fruit supplier's bank and 2) U.S. bank processing a non-U.S. tourist's payment to a CRL-listed Cuban store or hotel. In each case, the U.S. bank's role as intermediary is enough to make the transaction a prohibited indirect financial transaction.

Elimination of the U-Turn General License

OFAC has also eliminated the "U-turn" GL previously found at Section 515.584(d), which had authorized U.S. banking institutions to process funds transfers originating and terminating outside the U.S., provided that neither the originator nor the beneficiary was subject to U.S. jurisdiction.⁹

Under the amended regulations, U.S. banking institutions are now authorized only to reject (rather than block)¹⁰ such transfers. This is significant because prior to the CACR amendments, Cuba-related funds transfers that merely transited the U.S. financial system could be processed under the U-turn authorization. Going forward, those transfers must be rejected. Section 515.584(e) has also been amended to remove provisions that previously authorized the unblocking or return of transfers that would have been authorized under the former U-turn GL.

OFAC has granted and withdrawn this Cuba U-turn authority several times as U.S. policy has changed. OFAC issued the GL for the first time in March 2016 as part of the Obama Administration's easing of Cuba sanctions and later revoked it in October 2019 to implement the Trump Administration's 2017 Cuba policy, replacing it with an authorization to reject, but not block, such transfers. That 2019 amendment, similar to the current one, also removed the related unblocking authorizations. In May 2024, OFAC reinstated the U-turn authorization to facilitate remittances and payments for authorized transactions in the Cuban private sector and authorized the unblocking and return of U-turn transfers that had been blocked before the reinstatement. The current amendment is therefore the second time OFAC has eliminated the Cuba U-turn GL in seven years. Now, OFAC ties the change to the 2025 NSPM-5's prohibition on indirect financial transactions with entities and sub-entities on the Cuba Restricted List.

Accounts for Cuban Independent Private Sector Entrepreneurs

In addition, OFAC has eliminated the authorization formerly found at Section 515.584(h)(2), which allowed U.S. banking institutions to open and maintain accounts solely in the name of Cuban independent private sector entrepreneurs¹¹ (as defined in Section 515.340).¹² Accordingly, unless separately authorized by OFAC, banking institutions must immediately block funds and accounts maintained pursuant to the prior authorization.¹³ Consequently, a specific license from OFAC will be required to unblock such funds and accounts. The elimination of this GL directly affects Cuban private businesses that, under the former GL, could receive payments for goods or services in the U.S. and use those funds to make payments in the U.S. or abroad without the need to transit the money through the Cuban financial system, where it would either be frozen or lose most of its value.

The separate authorization in Section 515.584(h) for accounts solely in the name of a Cuban national located in Cuba, including receipt of payments through online payment platforms, remains available for authorized or exempt transactions. However, this authorization requires that the funds are remitted to Cuba. In other words, the Cuban national cannot receive payments into the U.S. account and then use those funds to make other payments in the U.S. or abroad. The funds must instead be remitted from the U.S. bank to Cuba. As a practical matter, this significantly limits the utility of these accounts. In addition, accounts for Cuban nationals lawfully present in the U.S. remain authorized under Section 515.571(a)(5), but they may be used only during periods while the Cuban account holder is lawfully present in the U.S. Once the Cuban national returns to Cuba or another country, the account may remain open, but it becomes inaccessible until he or she is again lawfully present in the U.S.¹⁴

Professional Meetings and Conferences

OFAC further amended the CACR to eliminate the GL for travel to Cuba to attend or organize professional meetings or conferences (previously found at Section 515.564).¹⁵ Accordingly, persons subject to U.S. jurisdiction are no longer authorized to travel to Cuba for professional meetings or conferences. However, the separate authorization for professional research under Section 515.564 has been retained and remains subject to the CRL and Cuba Prohibited Accommodations List (CPAL) exclusions.¹⁶

Notwithstanding the foregoing, OFAC has authorized persons subject to U.S. jurisdiction who were physically present in Cuba on September 30, 2026, under the former professional meetings authorization to continue to engage in travel-related and other previously authorized transactions through October 30, 2026, provided they depart Cuba by that date. This includes an authorization until October 30, 2026, for refunds and termination of trips arranged pursuant to the former authorization. Going forward, however, professional meeting travel to Cuba will require a specific license from OFAC, which will be evaluated by OFAC on a case-by-case basis.¹⁷

Educational and People-to-People Travel

OFAC has also significantly narrowed the educational activities and people-to-people travel authorizations at Section 515.565, consistent with NSPM-5's directive to restore requirements in effect on January 27, 2011.¹⁸ The amended regulations now distinguish between two categories of educational travel:

• Section 515.565(a)(1) – Accredited U.S. Institutions. Accredited U.S. undergraduate or graduate degree-granting academic institutions, their enrolled students and their full-time permanent employees may travel to Cuba under the institution's auspices for structured educational programs of at least 10 weeks, Cuba-related graduate research, formal study at a Cuban academic institution for at least 10 weeks for credit, teaching at a Cuban academic institution for at least 10 weeks, sponsoring Cuban scholars to teach or research at the U.S. institution, and related organizational and preparatory activities. Accompaniment by a representative of the sponsoring institution is no longer required, but letters from the institution will be required.
• Section 515.565(a)(2) – Other Educational Activities. All other educational activities – including secondary school exchanges, academic seminars, academic exchanges, standardized testing, undergraduate-level online courses and facilitation by affiliated organizations – must be conducted under the auspices of an organization subject to U.S. jurisdiction, and all travelers must be accompanied by a representative of the sponsoring organization (with a narrow exception for an individual representative carrying a letter from the organization).¹⁹

OFAC has removed the GL for group people-to-people educational travel at former Section 515.565(b), which had authorized organized, full-time educational exchange programs in Cuba, and the prohibition now applies to people-to-people travel both individually and in groups.²⁰

OFAC has included "grandfathering" provisions for both people-to-people and educational travel. Travel under the provisions as they existed on June 30, 2025, remains authorized where the traveler completed at least one travel-related transaction such as purchasing a flight or reserving accommodations for that specific trip prior to September 30, 2026.²¹ Otherwise, future people-to-people travel will require a specific license from OFAC (Section 515.565(g)). The CPAL restrictions continue to apply and primarily tourist-oriented activities remain unauthorized.

Practical Implications

The cumulative effect of these September 30, 2026, actions is a substantially more restrictive and complex Cuba sanctions framework that signals a decisive escalation of U.S.-Cuba sanctions policy and requires heightened diligence across multiple regulatory frameworks. Companies, financial institutions and other stakeholders should consider the following practical implications:

• Dual-Track Compliance. All Cuba-related activity must now be evaluated under both the CACR and CSR in parallel. Although GL 1 currently bridges the two regimes by authorizing CSR-prohibited transactions to the extent they are authorized or exempt under the CACR, any future narrowing of GL 1 or the CACR GLs would directly increase exposure under the CSR. Organizations should build dual-track review into their compliance workflows.
• Enhanced CRL Screening. The expansion of the CRL prohibition to indirect financial transactions requires organizations to look beyond their direct counterparties and screen all originators, intermediaries and ultimate beneficiaries in Cuba-related transaction chains. Compliance programs should be updated to reflect this broader screening obligation.
• Payment Processing and Correspondent Banking. The elimination of the U-turn GL removes a long-standing authorization on which non-U.S. financial institutions have relied to route Cuba-related payments through U.S. correspondent banks. Institutions should evaluate alternative payment channels and assess the operational impact on existing correspondent banking relationships.
• Entrepreneur Account Wind-Down. U.S. financial institutions must immediately block funds and accounts maintained pursuant to the prior authorization. U.S. financial institutions holding accounts for Cuban independent private sector entrepreneurs must also initiate wind-down procedures in accordance with OFAC guidance. Institutions should identify affected accounts and ensure orderly closure within the applicable timeframe. Owners of such funds or accounts that are blocked will need to apply for a specific license from OFAC to unblock them.
• Travel and Academic Programs. The narrowing of the educational travel GL and the elimination of group people-to-people travel and professional meetings authorizations will require academic institutions, travel providers and conference organizers to reassess their Cuba-related programs. Programs that do not meet the new requirements will need to be restructured or discontinued.

Looking Ahead

OFAC has indicated that the CSR were published in abbreviated form and more comprehensive regulations, interpretive guidance and additional licenses will be forthcoming. Further designations under EO 14404 should be expected. The CACR amendments further eliminate or significantly narrow a number of authorizations that had facilitated travel, educational exchange and financial transactions involving Cuba.

Accordingly, companies, financial institutions and other stakeholders with Cuba-related operations, transactions or counterparty exposure should assess whether existing Cuba-related activities remain authorized under both the CSR and CACR (taking into account GL 1's bridging function and its limitations) and act promptly to address these changes, including updating screening protocols, reviewing compliance programs and, for banks, implementing the U-turn elimination and entrepreneur account blocking requirements.

Holland & Knight continues to monitor these developments closely. For assistance with assessing the impact of these changes on your specific business activities, updating compliance systems or evaluating the advisability of seeking specific licenses from OFAC, please contact the authors of this alert or another member of the Cuba Strategic Advisory Team, Financial Services Regulatory Team or International Trade Group.

Notes

¹ National Security Presidential Memorandum-5, signed June 30, 2025.

² EO 14404, 91 Fed. Reg. 25061 (May 7, 2026).

³ EO 14380 (Jan. 29, 2026), "Addressing Threats to the United States by the Government of Cuba."

⁴ See 31 C.F.R. Section 516.101.

⁵ See OFAC's "Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are Blocked," (Aug. 13, 2014).

⁶ See OFAC FAQ 1151.

⁷ See OFAC FAQ 1271.

⁸ The prohibition on direct or indirect financial transactions with entities and sub-entities on the CRL applies to the following general licenses: Sections 515.530 (powers of attorney), 515.534 (contingent contracts), 515.545 (information/informational materials), 515.560 (travel-related transactions), 515.561 (family visits), 515.564 (professional research), 515.565 (educational activities), 515.566 (religious activities), 515.567 (public performances), 515.572 (travel services), 515.573 (physical and business presence in Cuba), 515.574 (support for the Cuban people), 515.576 (private foundations or research or educational institutes), 515.577 (publishing), 515.578 (internet-based services), 515.581 (conferences in third countries), 515.584 (certain financial transactions), and 515.590 (certain grants, scholarships, and awards). In certain cases, carve-outs have been retained consistent with NSPM-5, Section 3(a)(iii), including exceptions under Sections 515.573 and 515.584(f) for agricultural commodities, medicines and medical supplies, telecommunications and internet items for the Cuban people, and air and sea operations supporting permissible travel, cargo, or trade; and Section 515.574 for transactions on behalf of NGOs. See OFAC FAQ 734.

⁹ See former 31 C.F.R. Section 515.584(d); FAQ 757 and 1272.

¹⁰ See OFAC FAQ 757.

¹¹ The term "independent private sector entrepreneur" means a Cuban national who is not a prohibited official of the government of Cuba or a prohibited member of the Cuban Communist Party and is 1) an owner, including a self-employed individual (cuentapropista) or employee of a small private business entity, private cooperative or sole proprietorship located in Cuba, in each case of up to 100 employees, 2) an independent contractor or consultant, 3) a small farmer who owns his or her own land, 4) a small usufruct farmer who cultivates state-owned land to sell products on the open market and/or 5) a private cooperative or small private business entity located in Cuba of up to 100 employees that is owned only by individuals described in paragraphs (a) through (d).

¹² Former 31 C.F.R. Section 515.584(h); see FAQ 748 and 1273.

¹³ See OFAC FAQ 748 and 1273.

¹⁴ See OFAC FAQ 745 ("[B]anking institutions are permitted to maintain accounts for certain Cuban nationals present in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization. Although the account may remain open while the Cuban national is not in the United States, access to such accounts must be limited to periods during which the Cuban national is lawfully present in the United States.")

¹⁵ See 31 C.F.R. Section 515.564, as amended; FAQ 1275.

¹⁶ See OFAC FAQ 761.

¹⁷ See OFAC FAQ 701.

¹⁸ See 31 C.F.R. Section 515.565, as amended; FAQ 1274; NSPM-5, Section 3(b)(i).

¹⁹ See OFAC FAQ 702.

²⁰ See OFAC FAQ 704.

²¹ 31 C.F.R. Sections 515.565(b), (c), as amended. The grandfathering provision applies to travel under the provisions as they existed on June 30, 2025.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.