The US Treasury Department’s Office of Foreign Assets Control has significantly expanded its Cuba sanctions regime, introducing sweeping new rules effective 30 September.
OFAC issued a new Cuba Sanctions Regulations framework under 31 C.F.R. Part 516, alongside amendments to the long-standing Cuban Assets Control Regulations under 31 C.F.R. Part 515.
The changes implement Executive Order 14404, signed on 1 May, which created an entirely new Cuba sanctions programme running alongside the existing regulatory structure.
The order allows OFAC to sanction Cuban and non-Cuban foreign persons operating in sectors including energy, defence, metals and mining, financial services, and security.
Foreign banks that conduct or facilitate significant transactions for persons blocked under E.O. 14404 now risk losing US correspondent or payable-through account access, or being blocked themselves.
OFAC exercised those powers as early as 17 September, adding individuals and entities to the Specially Designated Nationals list under the new executive order framework.
One of the most consequential changes for financial institutions is the elimination of the so-called US-turn payment authorisation, which previously allowed US banks to process Cuba-related transfers beginning and ending outside the United States.
Banks are now authorised to reject such transfers outright, and accounts held for Cuban private sector entrepreneurs must be blocked and reported unless a specific licence is obtained.
The Cuba Restricted List prohibition has also been extended to cover indirect transactions, meaning a US bank processing a payment between two non-US parties could now face liability if one of those parties appears on the list.
OFAC added an anti-evasion rule to accompany the expanded restriction, and updated guidance indicates banks may rely on customer statements and ordinary due diligence unless they have reason to suspect otherwise.
On the travel side, persons subject to US jurisdiction can no longer use a general licence to attend or organise professional meetings or conferences in Cuba.
Group people-to-people travel authorisation has also been eliminated, while educational travel now generally requires a US sponsoring organisation and an accompanying representative to remain permitted.
A wind-down period runs through 30 October for those already in Cuba on 30 September and for cancelling trips and obtaining refunds, with grandfathering available for travel where at least one booking transaction was completed before 30 September.
Companies, universities, and professional organisations with Cuba travel plans are urged to confirm whether those trips remain authorised under the new framework.
More broadly, any business with Cuba-related transactions should review whether its screening and payment controls account for both the expanded Cuba Restricted List restrictions and the new E.O. 14404 framework.