22OCT

OFAC closes Cuban firms' US accounts

4 min read

17:12UTC

Since 30 September US banks may not hold accounts for Cuba's private entrepreneurs, and dollar payments between third countries can no longer clear through New York.

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PoliticsAssessed

Key takeaway

Cuban private firms lost access to US bank accounts on 30 September.

OFAC (Office of Foreign Assets Control), the US Treasury's sanctions office, barred US banks on 30 September from opening or keeping accounts for Cuba's independent private entrepreneurs⁠¹. Money those firms already hold now needs a specific licence, a case-by-case Treasury permission, to release. The final rule rewrites the Cuban Assets Control Regulations (CACR), part 515 of the US Code of Federal Regulations and the embargo rulebook. It implements NSPM-5, the National Security Presidential Memorandum Donald Trump signed on 30 June 2025.

The amendment bars indirect as well as direct dealings with the Cuba Restricted List, the US State Department's register of companies tied to Cuba's military and security services, and adds an anti-evasion clause. It also ends U-turn transfers, payments that start and finish outside the United States but clear through a US bank; American banks may now only reject them. A Spanish importer paying a Havana supplier in dollars loses the New York leg its payment used to take.

Group people-to-people travel, the organised educational tours many Americans used to visit legally, ended except for trips booked before 30 September. The general licence for professional meetings, a standing permission that needed no application, also ended; anyone in Cuba under it must leave by 30 October. OFAC's guidance in FAQ 1271 carries the indirect bar into 18 general licences, family visits and "support for the Cuban people" among them⁠². A US visitor who pays an unlisted agent that then settles with a hotel owned by Grupo de Administración Empresarial, the military conglomerate, now carries the risk.

OFAC opened a second rulebook the same day, the Cuba Sanctions Regulations at part 516⁠³. It rests on EO 14404, the May executive order under which the State Department designated ten Cuban entities in July. It also rests on the International Emergency Economic Powers Act (IEEPA), the 1977 law that lets a president freeze assets after declaring a national emergency. The older part 515 rules stand on the Trading With the Enemy Act, so lifting either legal base would leave the other in force. OFAC calls part 516 abbreviated and says fuller rules, definitions and general licences will follow.

NSPM-5 says its aim is to stop money reaching Cuba's security services at the expense of the Cuban people and private enterprise. On that premise, a dollar route open to a café is open to a state front dressed as one. OFAC's rule text offers no reason for closing private accounts beyond "the Administration's policy toward Cuba".

Deep Analysis

In plain English

Cuba has been under a US trade embargo since the early 1960s. The rules that run it are written by OFAC, the US Treasury office that enforces sanctions. On 30 September OFAC changed those rules. American banks can no longer hold accounts for Cuba's small private businesses, such as family restaurants or repair shops. Money moving between two foreign banks can no longer pass through an American bank on the way. Some kinds of organised tourist trips from the US have ended. The rules also bar deals that reach a blacklisted Cuban company indirectly, through a middleman. That matters because companies run by Cuba's armed forces own many hotels and shops.

Deep Analysis

Root Causes

Dollar clearing runs through correspondent accounts at US banks. A payment from a Spanish importer to a Havana supplier in dollars touches New York for seconds, and that touch is what gives OFAC jurisdiction over a deal between two foreign parties.

The Cuba Restricted List now covers any entity acting for the benefit of Cuba's military, intelligence or security services where a deal would disproportionately benefit them. GAESA, the military conglomerate, owns hotels, retail chains and port services, so an indirect-dealing bar reaches deep into ordinary tourist spending.

The CACR is executive regulation under the Trading With the Enemy Act. Each administration rewrites it by Federal Register notice, which is why travel and banking rules for Cuba swing with every change of president.

What could happen next?

Consequence
US banks are likely to drop Cuba-linked customers broadly rather than screen each payment for indirect contact with the Cuba Restricted List.
Short term · Assessed
Risk
Cuban private firms that held US accounts lose access to their balances until OFAC grants specific licences, which it issues case by case.
Immediate · Assessed
Precedent
Part 516 gives the 2026 designations a separate IEEPA rulebook, so a future administration would need two repeals to unwind the programme.
Long term · Assessed

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: In September 2019 OFAC withdrew the U-turn authorisation for Cuba, and in May 2024 the Biden administration restored it alongside the licence for private-entrepreneur accounts. The 30 September 2026 rule reverses both clauses again, so the same two provisions have changed three times in seven years, each time by a Federal Register notice and never by Congress.

Counter-parallel: OFAC revoked Iran's U-turn authorisation in November 2008. Iranian trade did not stop; it moved into euro and dirham settlement through Dubai, which suggests that third-country trade with Cuba will reroute into other currencies rather than end.

Immediate impact falls on balances already sitting in US accounts held by Cuban private entrepreneurs: those funds now need a specific licence, a case-by-case Treasury permission, before release. Group people-to-people tour operators lose their product for any trip not booked before 30 September, and conference travellers face the 30 October wind-down.

Structurally, the U-turn ban pushes third-country trade with Cuba out of dollars. European, Canadian and Mexican firms that invoiced in dollars must now find a non-US bank willing to settle in euros or pesos, and that pool shrank after the Banco Exterior de Cuba designation.

Each extra currency conversion adds cost that Cuban buyers pay in a peso already under pressure.

Consensus view: The Washington Office on Latin America (WOLA) and the Cuba Study Group read the account ban as a reversal of the 2024 OFAC amendments that first gave Cuban private entrepreneurs US bank accounts. Their mechanism argument runs through payments: a café owner in Havana paid by a Miami relative now has no dollar account outside Cuba's state banks, so the money moves through those banks or through informal couriers.

Counter-view: The Heritage Foundation and the Center for a Free Cuba argue that a Cuban small firm cannot be screened apart from its state suppliers, because the same state licenses the firm and owns most of what it buys.

On that reading the account ban shuts a route for state money dressed as private money. Havana's Centro de Investigaciones de Política Internacional (CIPI) takes the opposite conclusion from the same rule: Washington's stated support for Cuban private business does not survive contact with Cuban reform.

Key tension: Whether US banks read the new indirect-dealing bar so widely that they refuse every Cuba-linked payment, including those the 18 general licences in FAQ 1271 still nominally allow.

First Reported In

Update #15 · Cuba opens oilfields, US cuts dollar routes

OFAC / US Treasury· 22 Oct 2026

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Causes and effects

This Event

OFAC closes Cuban firms' US accounts

The rule cuts Cuba's private sector out of the US banking system and puts Cuba sanctions on a second legal footing that outlasts any repeal of the old embargo rules.

Led to

Treasury blacklists a second Cuban bank

The 15 October bank designation followed the 30 September rules that closed U-turn and private-sector dollar routes.

Occurred 15 Oct 2026

Read story →

Different Perspectives

UN General Assembly

The Assembly passed last year's resolution against the US embargo by 165 votes to 7, with 12 abstentions, and votes again on 28 October. That count is the baseline against which Havana's lobbying claims and Washington's pressure will be measured.

Mexican Navy (Secretaría de Marina)

A Mexican Navy team inspected Grace at Progreso and found fuel in its ballast tanks, according to the US Coast Guard. The account of Mexico's role comes from Washington; the Mexican government's own position on the stop is not on record in the sources reviewed.

Pedro Monreal, independent Cuban economist

Monreal says the gazette contains no rule for the exchange-house licence ADT 64 received, so nobody knows how a second firm could apply. He says a representative rate would need at least ten houses in five provinces, Havana included.

Prisoners Defenders and OCDH (Madrid-based exile monitors)

Prisoners Defenders counted a record 1,351 political prisoners at the end of September, and OCDH logged at least 344 repressive actions that month. OCDH asked the European Union on 11 September to investigate possible trafficking in Cuba's medical brigade in Italy.

Florida Attorney General James Uthmeier

Uthmeier announced a no-bond state warrant for Raúl Castro on 19 October over the 1996 Brothers to the Rescue shootdown, after reopening the state investigation last year. The four men killed flew for a Miami exile group, and the warrant restricts Castro's travel rather than reaching him in Cuba.

Cuban government (Foreign Minister Bruno Rodríguez Parrilla)

Rodríguez said on 21 October that Washington is pressing governments to abstain or leave the hall in the 28 October UN vote and called Florida's Raúl Castro warrant worthless. Havana is presenting its October oil and trade rules as openings and the US measures as an energy blockade.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.