For decades, the United States has maintained a broad embargo on Cuba, first introduced during the Cold War and later codified through legislation such as the Helms-Burton Act. The law reinforces the US trade embargo and includes a controversial provision allowing US nationals to sue companies that profit from property confiscated by the Cuban government after the 1959 Communist revolution.
When the first Trump administration activated Title III of the Helms-Burton Act in 2019, it dramatically expanded the legal exposure for foreign companies operating in Cuba. Businesses that used property nationalised during the revolution could suddenly face lawsuits in US courts, even if their activities were entirely lawful in their home jurisdictions.
This extraterritorial reach created immediate tension with US allies. Canada, for example, relies on the Foreign Extraterritorial Measures Act (FEMA) to counter US sanctions enforcement related to Cuba. The law prohibits Canadian companies from complying with certain US measures and allows businesses targeted under US judgments to recover damages in Canadian courts.
The result is a classic conflict-of-laws problem. A Canadian or European firm trading with Cuba might face lawsuits in the United States for continuing its operations. Attempting to comply with US sanctions, however, could expose the same company to penalties at home for violating blocking legislation designed to protect domestic trade with Cuba.
For compliance teams, this type of legal collision is one of the most difficult sanctions environments to manage.
The Venezuela-Iran-Cuba axis
The sanctions picture may become even more complicated in the coming months. Washington has already applied escalating pressure on governments in Iran and Venezuela through sanctions, economic restrictions and legal action. The Trump administration’s intervention in Venezuela and the removal of Nicolás Maduro has reinforced the message that the US is prepared to use economic tools aggressively in the region.
President Trump is making it clear that Cuba will become the next focus of the Administration’s interventionist foreign policy. Washington has already begun tightening pressure. Measures targeting energy supplies have sharply reduced Cuba’s access to Venezuelan oil, contributing to electricity shortages and deepening economic instability on the island. At the same time, US officials have signalled that additional sanctions and legal actions against Cuban officials are under consideration.
Public rhetoric from the administration has also intensified, with warnings that Cuba must negotiate with the United States or face severe consequences. When the current conflict with Iran begins to wind down, Washington’s geopolitical attention will inevitably pivot quickly toward Havana.
The importance of international coordination
For businesses and compliance teams, the central risk is divergence between jurisdictions. The Helms-Burton framework shows how quickly this can happen. A company operating hotels, shipping routes or logistics infrastructure in Cuba could face lawsuits in the United States for “trafficking” in confiscated property. At the same time, the same activity may remain legal in Canada, the UK or the European Union.
Blocking statutes in those jurisdictions may even prohibit companies from complying with US sanctions. Without coordinated policy between the US, Canada and Europe, firms can face exposure on several fronts simultaneously. They could face civil litigation risk in US courts, regulatory enforcement risk in their home jurisdiction and reputational exposure linked to sanctions compliance decisions Several enforcement cases over the past decade illustrate how easily businesses can fall foul of Cuban sanctions rules.
Real enforcement cases: how companies have been caught by Cuba sanctions
Expedia – travel services to Cuba
In 2019 the US Treasury’s Office of Foreign Assets Control (OFAC) fined the travel platform Expedia $325,406 after subsidiaries provided travel services related to Cuba for more than 2,200 individuals in violation of US sanctions regulations.
According to OFAC, the violations occurred because foreign subsidiaries lacked a clear understanding of US sanctions rules. Employees processed travel bookings involving Cuba without recognising the compliance risk.
Although the company voluntarily disclosed the issue and cooperated with investigators, the case highlights a common sanctions failure: decentralised global business units operating without adequate sanctions controls.
EFG International – banking transactions linked to Cuba
In another example, Swiss private bank EFG International agreed to pay approximately $3.7 million to settle allegations that it processed hundreds of securities transactions linked to sanctioned jurisdictions, including Cuba.
The transactions were conducted through omnibus accounts, which obscured the identities of underlying clients and allowed Cuban-linked transactions to pass through US financial markets.
Regulators concluded that inadequate visibility into underlying clients and weak sanctions screening controls allowed the activity to occur.
Key Holding – logistics shipments to Cuba
More recently, in 2025 OFAC announced a $608,825 settlement with logistics company Key Holding for apparent violations of the Cuban Assets Control Regulations. The breaches occurred when a Colombian subsidiary arranged freight shipments connected to Cuba.
The case illustrates another frequent sanctions risk: overseas subsidiaries engaging in Cuba-related activity without understanding the reach of US sanctions laws.
How firms can manage Cuba sanctions risk
In previous geopolitical crises, including the early stages of US military pressure on Iran, analysts observed large volumes of digital assets leaving the country as individuals attempted to move wealth beyond the reach of sanctions.
A similar pattern could emerge in Cuba if financial restrictions tighten rapidly. Crypto flows, informal remittances and offshore financial networks often expand quickly when sanctions risk increases. For financial institutions and payment providers, that creates additional monitoring challenges.
For organisations with exposure to Latin America, tourism, logistics, finance or shipping, the shifting sanctions environment around Cuba requires careful monitoring. Several practical compliance steps can help mitigate the risk.
Conduct a Cuba exposure assessment
Companies should identify whether any part of their operations touches Cuba directly or indirectly. This includes:
- Supply chains involving Cuban goods
- Tourism or travel services
- Logistics or freight operations
- Financial transactions linked to Cuban individuals or entities
Indirect exposure through subsidiaries or partners is often where risks emerge.
Review subsidiary and partner activities
Many sanctions breaches occur through overseas subsidiaries or joint ventures that operate under different legal regimes. Compliance teams should ensure that subsidiaries understand US sanctions exposure even when operating outside the United States.
Screen property and infrastructure risks
Under the Helms-Burton Act, companies can face lawsuits for using property confiscated after the Cuban revolution. Businesses involved in tourism, infrastructure or real estate should assess whether any assets they use in Cuba are subject to potential ownership claims.
Strengthen sanctions screening and transaction monitoring
Banks and financial institutions should review controls around:
- Omnibus accounts
- Beneficial ownership visibility
- Transaction screening involving Cuban entities
These controls were central to several enforcement actions.
Monitor geopolitical developments closely
Sanctions policy can change quickly. Firms should monitor signals from Washington and allied governments regarding potential new measures against Cuba. Early awareness allows companies to adjust operations before enforcement actions begin.
