The U.S. sanctions landscape continues to evolve as the current Presidential Administration increasingly relies on sanctions and targeted licensing to advance its foreign policy objectives in Cuba and Venezuela. Although these policies pursue markedly different economic outcomes, both are implemented through the same sanctions framework. On one hand, the Administration has sought to expand economic opportunities in Venezuela by broadening authorizations for limited commercial activity through OFAC general licenses. On the other, it has intensified economic pressure on Cuba by expanding the reach of U.S. sanctions beyond U.S. persons to foreign individuals, companies, and financial institutions that engage in specified transactions involving the Cuban economy.

The flurry of recent actions necessitates a renewed examination of the U.S. Cuban and Venezuelan sanctions regimes.

Covered topics:

• Recent OFAC Venezuela-related General Licenses;
• Expansion of secondary sanctions under Executive Order 14404;
• Practical compliance considerations that arise where these two sanctions regimes intersect.

 As companies continue to navigate business opportunities in Latin America, understanding the interaction between these measures will be critical to managing sanctions risk in light of new measures and maintaining compliance in the event of cautiously exploring new business opportunities in the market.

Open for Business: Expansion of Venezuela General Licenses

Beginning in early 2026, OFAC significantly expanded the number of potentially authorized transactions available under the Venezuela Sanctions Regulation by issuing a series of new and amended General Licenses (“GLs”). These measures reflect a caveated approach to U.S. sanctions policy, permitting certain commercial activities that were previously prohibited, as long as the Office of Foreign Asset Controls (“OFAC”) approves, while maintaining restrictions on broader dealings with the Government of Venezuela and other sanctioned parties.

The new authorizations target certain industry sectors (e.g., oil and energy) whose major players are historically state-owned, and financial services with several state-owned banks, all subject to strict requirements. Broadly, they permit both U.S. and foreign companies to engage in certain transactions involving the Government of Venezuela, Petróleos de Venezuela, S.A. (PDVSA), Minerven, and other state-owned entities. Although the new licenses significantly expand the range of permissible activities, they remain narrowly tailored, and transactions falling outside their scope generally require a specific license or other authorization from OFAC before a contract can be executed.

Companies seeking to rely on one of the new GLs must ensure that the proposed transaction falls squarely within the scope of the applicable license and satisfies all associated conditions. This includes screening counterparties, financial institutions, vessels, freight providers, and subcontractors against applicable sanctions lists; avoiding prohibited payment structures, such as debt swaps, payments in gold, or the Venezuelan digital currency; and complying with any applicable U.S. export control requirements under the EAR and ITAR. Many of the licenses also impose additional compliance obligations, including restrictions on dealings involving entities owned or controlled by Specially Designated Nationals (“SDNs”) or other high-risk jurisdictions, requirements for commercially reasonable contracts governed by U.S. law, limitations on payment terms, and, in certain cases, mandatory routing of payments through a special U.S. Government of Venezuela fund. Several licenses further require initial and periodic reporting to OFAC, together with detailed recordkeeping documenting authorized activities. Accordingly, while these general licenses create meaningful commercial opportunities, they also impose substantial compliance obligations, making robust sanctions due diligence essential before relying on any general license.

Foreign companies looking to capitalize on new business opportunity with Venezuela should also be aware of the new requirements imposed by many of the GLs. OFAC has taken the position that non-U.S. persons who do not comply with the conditions of new General Licenses run the risk of being secondarily sanctioned. Although this risk is not new, it is significant because it is being specifically reiterated in the Venezuelan context.

Looking Elsewhere: Cuban Sanctions Regime Updates

Historically, the United States has relied on the Cuban Assets Control Regulations (“CACR”) to impose primary sanctions on Cuba, generally prohibiting U.S. persons and businesses from engaging in transactions with Cuba or Cuban nationals. Foreign individuals and businesses with no U.S. nexus, however, were generally insulated from direct U.S. sanctions because the CACR’s underlying authority was primarily territorial in scope.

Executive Order 14404, signed on May 1, 2026, significantly broadened the current Cuban sanctions regime by providing an explicit avenue for its extra-territorial reach. Similar to the Russian Sectoral Sanctions Identification (“SSI”) List, the new proclamation authorizes the imposition of sanctions on foreign persons, including foreign financial institutions, that conduct business in broad sectors of the Cuban economy, including the energy, defense and related materiel, metals and mining, financial services, and security sectors, regardless of whether the underlying transaction has a U.S. nexus.

To implement this, OFAC and the U.S. Department of State designated several key Cuban entities and officials, including Grupo de Administración Empresarial S.A. (“GAESA”), Cuba’s Ministry of the Interior, the National Revolutionary Police, the Directorate of Intelligence, and various senior government officials. As a result, foreign companies and individuals that continue to engage in certain commercial relationships with these designated parties may now face secondary sanctions, including restrictions on access to the U.S. financial system.

In the hopes of facilitating an orderly transition, OFAC issued general FAQ guidance authorizing a wind-down period through June 5, 2026, during which foreign persons could terminate pre-existing relationships without triggering secondary sanctions. Going forward, however, companies conducting business in or with Cuba should carefully evaluate their counterparties and supply chains, as this sanctions expansion significantly increases the compliance risks for non-U.S. persons operating in the region.

Out with the Old, in with the New: Putting it All Together

The recent developments in the Cuba and Venezuela sanctions programs illustrate the increasingly nuanced nature of U.S. sanctions policy. While OFAC has expanded opportunities for authorized trade with Venezuela through a series of targeted general licenses, the simultaneous expansion of the Cuba sanctions regime increases the compliance risks for U.S. and foreign persons associated with conducting business in the region. Given the longstanding political and commercial ties between Cuba and Venezuela, companies relying on Venezuela-related general licenses should carefully assess whether otherwise authorized transactions involve Cuban counterparties or other designated persons that could expose them to secondary sanctions risk.

Although the two regimes are not inherently inconsistent, they do require companies to navigate a more complex compliance landscape. Transactions that are authorized under a Venezuela-related general license must still be evaluated for potential Cuba-related sanctions exposure, as well as compliance with all applicable OFAC licensing conditions, reporting obligations, and recordkeeping requirements. Companies should consider enhanced due diligence procedures, monitoring of OFAC and State Department designations, and close analysis of existing business relationships. As the Administration continues to refine its sanctions strategy in Latin America, proactive compliance will be essential to taking advantage of newly authorized business opportunities while minimizing enforcement risk.