New US sanctions will worsen Cuba's humanitarian crisis and torpedo economic reform
Hurriedly, at the worst possible moment, with the same (bad) administrators at the helm of the state, and, above all, forced by a policy of economic asphyxiation, Cuba has embarked on the most far-reaching economic reform since 1959. Foggy Bottom's head can say whatever he wants, but any rational person evaluating that process will find that these are not mere patches, and that it goes much further than the reforms of the Special Period and even further than what many — myself included — who most strongly advocated for representative changes once dreamed possible. Never in the past 67 years has this country been so pro-market, even if many consider it insufficient. Beyond the Trump effect, the island's authorities had taken far too long to take any meaningful step. We have been stumbling for some time, digging deeper into the severity of our wound, and therefore demanding more aggressive and riskier steps. No strictly political modifications are in sight, which the country also urgently needs. However, the change in the economic agenda has shaken the foundations of the Cuban sociopolitical regime.
The current crisis dates back to 2019, as I explain in this recent post here. It is, yes, closely tied to everything that falls under poor internal management, including corruption, but also, or fundamentally, to the reinforced policy of economic asphyxiation that has been applied — and escalating — since the first Trump administration. No actors are willing to sell fuel to Cuba because of the sword of Damocles hanging over anyone who dares even to project that possibility. The siege on international financial movements related to Cuba, its most critical state enterprises, and its sources of foreign income has intensified to unprecedented levels. What does this translate into today? Extremely long power outages of more than 24 continuous hours, very low levels of transportation and water supply, runaway inflation, and so on, resulting in an extraordinary, alarming disruption in the reproduction of material life.
September 30: A new layer in the sanctions regime against Cuba
On September 30, 2026, substantive modifications to the US sanctions regime against Cuba entered into force. The package published by the Office of Foreign Assets Control (OFAC) comprises the new Cuba Sanctions Regulations, intended to implement Executive Order 14404, and amendments to the Cuban Assets Control Regulations (CACR), first introduced in 1963. OFAC accompanied the change with five new FAQs and 29 additional updates, plus a specific alert about increased sanctions risks in operations related to Cuba. The takeaway is that one must stay even further away from Cuba, or see yourself exposed to a thicket of exhaustive OFAC investigations. This year the island saw everything from its connections with European tour operators to its historic relationship with Canadian miner Sherritt break down. In other words, there is an explicit consensus that it is not worth testing Washington's resolve on the Cuba issue.
From direct to indirect operations
One key change affects the so-called Cuba Restricted List (CRL), which identifies entities and subentities that the State Department considers linked to Cuban military, intelligence, or security services. GAESA, for example, is a conglomerate directly linked to Cuba's Revolutionary Armed Forces. It manages a portfolio full of strategic and profitable economic activities, like remittance processing and tourism. Until now, the CACR prohibited persons subject to US jurisdiction from engaging in direct financial transactions with entities on that list. Since September 30, the prohibition also covers indirect financial transactions: you cannot touch anything that smells of Cuba.
The closure of the U-turn banking channel
Another fundamental amendment affects operations known as U-turn. Before September 30, banks subject to US jurisdiction could process certain Cuba-related transfers when the money originated and ended outside the United States, without the main parties being subject to US jurisdiction. Obama introduced this possibility during the détente of the second half of his last term. Trump closed it, Biden reopened it, and Trump surely took a long time to close it again. It would be worth seeing, in any case, if Cuba took advantage of this window, since it enabled the legitimate use of the dollar in certain international transactions.
A particularly significant blow to the private sector
The third relevant modification is especially striking, given the narrative of any US administration in recent years regarding the no-longer-so-emerging Cuban private sector, which has always been seen as a Trojan horse containing within itself the seed of a regime change, or as a movement that embodies primarily economic demands that at some point become political. Where the Republican perspective — and in particular that of the political representatives of the so-called Cuban exile — clashes with the Democrats' is that those of the Grand Old Party are reluctant to accept that under the current political regime a genuine private sector can be born, so that all, or at least those projects that succeed, are genetically connected to the state apparatus in some way. Thus, Donald Trump's OFAC eliminated the authorization that allowed banking institutions subject to US jurisdiction to open and maintain accounts in the name of Cuban private entrepreneurs residing in Cuba, to carry out operations authorized or exempt under the CACR. From now on, unless there is another specific authorization, those institutions must immediately block the affected funds and accounts; unblocking them requires a specific OFAC license.
The closure of travel and exchange channels
The modifications are not limited to the financial system either. OFAC introduced important changes to authorizations for traveling to Cuba. The most visible case is that of people-to-people educational travel, which during the Obama thaw was blessed by a general license that could be understood as a veiled authorization for tourism. Americans are prohibited by law from tourism in Cuba. It is the only country in the world where this restriction emerges from a statute. Historically, these people-to-people exchanges had to be made under the auspices of a certified organization. Obama loosened that license so that Americans could travel even individually. Trump reinstated the organization requirement and now eliminates this license entirely. Since September 30, the administration maintains only a transitional provision for certain travelers who carried out a specific operation — for example, purchasing an airline ticket or booking an accommodation — before September 30.
OFAC also tightened the conditions of other educational activities. Certain modalities must now be supervised by an institution or organization subject to US jurisdiction, and, in some cases, travelers must be accompanied by a representative of the sponsoring entity. The regulation preserves some possibilities for accredited universities, academic research, and certain exchanges, but within a more conditioned framework. To this is added the elimination of the general authorization to attend or organize professional meetings and conferences in Cuba. Since September 30, those subject to US jurisdiction can no longer make those trips under the authorization that previously existed. OFAC established a limited period, until October 30, to wind down certain operations related to previously authorized travel.
All this acquires even greater scope when viewed together with the financial reform. Even those categories of travel that remain authorized — family visits, professional research, educational, religious activities, support for the Cuban people, cultural activities, and others — are now subject to the prohibition on direct or indirect financial transactions with entities and subentities included in the CRL. OFAC expressly modified the corresponding general licenses to reflect this new condition.
The underlying issue
OFAC itself maintains numerous licenses and exceptions for authorized activities, and does not present these modifications as a prohibition of all economic or humanitarian activity with Cuba. But restrictions do not need to close all channels to produce a systemic effect. It is enough to make narrower, more uncertain, and more costly those channels of payment, intermediation, and financial access on which authorized operations depend. September 30, therefore, can be understood as a step from the designation of sanctioned actors toward an expansion of the conditions of financial circulation around those actors. And that difference is fundamental for assessing how far the negative economic impact of US policy toward Cuba can extend in practice, reflected in the certain worsening of already impoverished living conditions and the insufficient takeoff of the economic reform underway.
Source for the cover image, obtained via X.