Key facts
- Trump administration expands U.S. sanctions on Cuba.
- New sanctions target foreign firms and banks doing business with GAESA.
- An executive order signed May 1 applies pressure beyond U.S. companies.
- Foreign firms face sanctions exposure for dealings with GAESA.
- GAESA is a military-linked conglomerate controlling a significant portion of Cuba's economy.
- Visa and Mastercard transactions will be suspended in Cuba.
The Trump administration has implemented a significant expansion of U.S. sanctions on Cuba, targeting foreign companies and banks that engage with the island's military-linked conglomerate, GAESA. This strategy, formalized by an executive order signed on May 1, marks a shift by applying pressure beyond U.S. entities for the first time. Supporters argue this closes loopholes that allowed foreign investors to sustain Cuba's regime, while critics express concern about exacerbating a humanitarian crisis. Max Meizlish, a former Treasury Department official, explained that this approach extends U.S. sanctions to third-party countries and enablers, a move described as unprecedented. GAESA, estimated to control 40% to 70% of Cuba's economy, is central to these sanctions, with potential penalties for foreign companies continuing dealings after a June 5 wind-down deadline. Critics, like William LeoGrande of American University, warn that these measures, while potentially depriving the government of revenue, will disproportionately harm ordinary Cuban citizens by limiting resources for essential imports like food, medicine, and fuel. The sanctions are being enacted amidst Cuba's severe economic and humanitarian crisis, characterized by food insecurity, fuel shortages, inflation, and widespread blackouts affecting critical services. Visa and Mastercard transactions in Cuba will be suspended due to the impact of U.S. sanctions. The Central Bank of Cuba announced that the interruption of the credit companies' activities was linked to the suspension of foreign bank services that processed these transactions. The bank stressed this was a consequence of the expanded sanctions regime on Cuba.