New US-Cuba sanctions increase compliance risks for shipping

For the maritime industry, the move represents a significant shift in US policy, extending the potential reach of sanctions beyond US persons and increasing the importance of due diligence across shipping transactions, the Shipowners’ Club has highlighted in an update. 

Key points to consider

Broader sanctions reach: EO 14404 authorises the US Treasury’s Office of Foreign Assets Control (OFAC) to designate foreign shipowners, operators, charterers, brokers, banks and insurers, even where there is no direct US connection.

Departure from previous policy: Until now, US Cuba sanctions largely applied to US persons, while non-US companies could continue trading with Cuba subject to existing restrictions, including the Cuban Assets Control Regulations’ (CACR) 180-day rule, which bars vessels that have called at Cuba from entering US ports for six months.

Targeted activities: The order allows OFAC to sanction foreign parties operating in Cuba’s energy, defence and related materiel, metals and mining, financial services, and security sectors, as well as those supporting the Cuban Government or blocked persons.

Indirect exposure: Companies providing “material assistance” to sanctioned parties may also face enforcement. The provision extends beyond direct dealings and can capture indirect support through charterers, brokers, bunker suppliers, receivers, banks and other counterparties.

Designation not automatic: While the five sectors are identified as areas of concern, OFAC has clarified that operating in one of them does not automatically result in designation. However, businesses with exposure to those sectors face heightened sanctions risk and should monitor developments closely.

First designations announced: On 7 May, the US State Department designated Grupo de Administración Empresarial S.A. (GAESA), Cuba’s military-controlled holding company with interests spanning ports, logistics, retail and tourism, alongside Moa Nickel SA and senior GAESA official Ania Guillermina Lastres Morera. OFAC simultaneously issued General License No. 1 to facilitate the wind-down of authorised transactions.

Wind-down period expired: The temporary licence allowing existing transactions involving GAESA expired on 5 June 2026, meaning businesses can no longer rely on the grace period for affected activities.

Due diligence expectations: Shipping companies are advised to review all Cuba-related voyages, port calls, bunkering arrangements, cargoes and counterparties, strengthen sanctions screening procedures, scrutinise ownership structures, and assess indirect exposure throughout the supply chain.

Contractual protections: Operators should ensure charterparties, BIMCO clauses, financing agreements and bunker contracts include sanctions provisions that address secondary sanctions risks and permit suspension or withdrawal where necessary.

Insurance implications: The advisory warns that insurance cover may not be available for voyages or transactions that breach applicable sanctions. Where US reinsurance applies, reimbursement may also be unavailable if reinsurers are prevented from making payments under US sanctions.

Greater scrutiny for Cuba trade

While EO 14404 does not prohibit all trade with Cuba, it significantly raises the compliance burden for international shipping interests and Cuba-related trade can no longer be regarded as low risk for non-US shipping companies.

With the potential for further designations and guidance from US authorities, shipowners, charterers and insurers are being urged to strengthen sanctions due diligence and carefully assess counterparties, cargoes and port calls before undertaking Cuba-related business.