The Russia Playbook Meets the Cuba Problem: Secondary Sanctions, the Blocking Statute, and the Cost of Doing it Alone

A Familiar Authority, New Territory

On May 1, 2026, the White House released Executive Order 14404, authorizing additional economic sanctions related to Cuba. This order takes further steps under the national emergency declared in Executive Order 14380 on January 29, which authorized tariffs against countries supplying oil to Cuba. These two orders clarified that pressure on third countries doing business with Cuba is at the core of U.S. strategy. In the months since, the United States has designated 55 entities and individuals under the new authority, including Grupo de Administración Empresarial S.A. (GAESA), the military conglomerate estimated to control most of the Cuban economy. GAESA was sanctioned in 2020 under the Cuban Assets Control Regulations; this new designation primarily serves to expand secondary sanctions risk for third country actors doing business with the entity.

Those familiar with the sanctions campaign against Russia will recognize the architecture immediately, as EO 14404 mirrors EO 14024 of April 2021 prong-for-prong. It includes sectoral designation authority for energy, defense and related materiel, metals and mining, financial services, and the security sectors. It enables the designation of government officials and leadership, and of adult family members of blocked persons. It even includes a foreign financial institution provision imported from the December 2023 revision to the Russia program, which exposes any bank that conducts or facilitates significant transactions for blocked persons.

Figure 1 shows how the Russia sanctions authority enabled the most expansive sanctions campaign in U.S. history. Now, the United States has taken that same legal machinery and applied it to Cuba. While the shape of this campaign is still subject to significant policy discretion, Cuba offers a distinct use case: one where European allies may be constrained from compliance, rather than active partners in a sanctioning coalition. This paper asks what happens when U.S. sanctions maximalism meets longstanding allied opposition to, and countermeasures against, sanctioning Cuba.

What the Playbook Did to Russia

Over the course of more than 6,000 Russia sanctions designations under EO 14024, the United States relied heavily on secondary sanctions, or designations of persons providing material support to blocked entities, to enforce its policy aims on third country intermediaries. Dozens of entities in Turkey, the UAE, India, and elsewhere were added to the U.S. SDN List for supplying sensitive, dual-use items to Russia.

Figure 2 shows that the pattern in secondary sanctions effectiveness resists a clean story. Individual conduits may have ceased operations after enforcement attention, but rarely without another conduit rising in their place. Turkish exports of sensitive items fell through 2023 and 2024 under accumulating designations, even as flows from India, and later other third countries, climbed. Aggregate volumes through these intermediaries did decline over the period, but the timing correlates only loosely with specific secondary sanctions. Rather than turning off the tap to Russia, secondary sanctions created a game of whack-a-mole across a rotating cast of entrepôts at the cost of constant enforcement attention.

When China and Hong Kong are included with the sanctioning coalition, the picture becomes clearer. Coalition exports of sensitive items to Russia collapsed after February 2022 and never recovered. Yet, Figure 3 shows total Russian imports of these items did largely recover within a year as China and Hong Kong backfilled the coalition’s share and the entrepôt network absorbed some of the rest. This is not to say that the Russia sanctions effort was a loss—these measures did restrict Russian access to higher quality sanctioning coalition technology and raise Russia’s cost of procurement.

With regards to Russia, these results were achieved under some of the most favorable conditions that any non-UN economic sanctions program has ever enjoyed: a full G7+ sanctioning coalition and entrepôt countries with no legal incentive for non-compliance. Even under these conditions, each round of secondary sanctions displaced targeted trade, rather than interdicting it. A maximalist Cuba program inherits the same mechanics without these favorable conditions.

The Cuba Sanctions Regime’s Structural Differences

A maximalist Cuba sanctions campaign would encounter at least three structural differences from the Russia case:

1. U.S. extraterritorial sanctions on Cuba are a founding catalyst for standing European counter-legislation. Council Regulation No. 2271/96—the EU Blocking Statute—was enacted in November 1996 in response to the Helms-Burton Act, and it prohibits EU persons from complying with the U.S. extraterritorial measures listed in its annex, nullifies the effect of related foreign judgments within the European Union, and provides a clawback right allowing EU operators to recover damages caused by their application. If the new Cuba authority is covered by the Statute, as was done for re-imposed Iran measures following U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA), European firms may face contradictory legal obligations from allied governments.
2. There is no coordination baseline to build on. As shown in CSIS’s paper on sanctions coordination, fewer than one percent of U.S. Cuba designations appear on EU or UK lists under any program—the lowest alignment rate of any regionally focused U.S. program. Where the Russia campaign began from a shared designation base and dense allied coordination, a maximalist Cuba campaign begins from zero—against allies with a fundamentally different posture towards Havana.
3. Cuba’s trade exposure runs through Europe. From 2021 through 2025, euro-area suppliers collectively accounted for an annual average $463 million in sensitive goods exports to Cuba, exceeding China’s $290 million. In the case of Russia, the target’s major technology suppliers were the sanctioning coalition itself, and the coalition accepted the cost of severing trade. With regards to Cuba, the equivalent suppliers sit outside any coalition, inside the Blocking Statute, and could choose to transact in a currency the United States does not control.

Mapping Exposure

Under the Russia sanctions authority, 17 percent of designations targeted subjects who were not Russian nationals or Russia-located entities, concentrated in China, the UAE, and Turkey. As the Russia sanctions program went on, this share of non-Russian persons targeted increased from just over 5 percent in 2022 to about 33 percent in 2025

If the targeting patterns observed under the Russia authority hold under the new Cuba authority, the designations will fall on allied commercial actors. A Canadian-Cuban nickel and cobalt joint venture and a Cuban state-owned enterprise that manages metallic mineral assets with notable Australian foreign investment have already been designated under the new Cuba authority. Of the 55 Cuba designations under this authority to date, at least three involve persons with identifiable allied touchpoints.

The Dollar Question

When the United States withdrew from the JCPOA and re-imposed secondary sanctions on Iran, Europe responded using similar tools available to it today. In addition to expanding the Blocking Statute’s annex, France, Germany, and the United Kingdom established the Instrument in Support of Trade Exchanges (INSTEX) in January 2019, a special-purpose vehicle designed to clear legitimate EU-Iran trade without touching the dollar system. INSTEX completed its first transaction in March 2020, and only handled a handful of transactions thereafter, before winding down in 2023.

Skeptics of de-dollarization will note that the scale objection is even stronger in the Cuba case. Cuba’s sensitive imports run to hundreds of millions of dollars a year; Russia’s ran to several billion a month. Nonetheless, in deploying the Foreign Financial Institutions provision of the Russia sanctions authority against Cuba, the United States is sending a clear signal to non-U.S. financial institutions that exposure to the dollar system carries greater policy risk. Simultaneously, alternative financial infrastructure that was relatively new in 2019 is more developed now: China’s Cross-Border Interbank Payment System now processes upwards of $100 billion daily, and the China-led international blockchain initiative mBridge is eyeing commercialization.

Between ongoing EU-Cuba trade, emerging alternatives in global finance, and the Blocking Statute, the new Cuba authority—and especially its use of the Foreign Financial Institutions provision—provides a unique incentive for foreign business to seek non-USD payment systems. This paper does not take a position on whether secondary sanctions on Cuba will move the needle on de-dollarization, but nonetheless, overuse of economic and financial pressure stands to consume U.S. leverage.

Recommendations

• Touchpoint Sequencing: The United States should first exhaust designations of actors operating entirely within Cuba, or with a genuine U.S. nexus, before reaching for targets with European and allied touchpoints. Because secondary sanctions often create trade diversion rather than interdiction, opening with designations against European entities may create conflict with the Blocking Statute without stopping the targeted trade.
• Diplomacy and Coordination: The Treasury and State Departments should establish a Cuba-specific consultation channel with Brussels and London in advance of actions touching European or British institutions or nationals to resolve conflicts, wind down complications, and assess clawback exposure before it becomes litigation. This is similar to the standing coordination mechanism proposed in CSIS’s companion paper, applied to a program where its absence has the potential to create significant complexity.
• Defining Tripwires: The second order risks this paper describes are observable. The United States should monitor for the emergence of dedicated Euro-clearing arrangements for Cuba-linked trade, amendment of the Blocking Statute’s annex to cover EO 14404, and the extension of existing non-dollar settlement mechanisms to Cuban counterparties. If these indicators trip, adjusting the use of secondary sanctions with the new Cuba authority may help protect the fundamental leverage of U.S. sanctions.

Conclusion

The Russia campaign showed how much this authority structure can do in favorable conditions: designations at unprecedented scale and secondary pressure on third countries, backed by a coalition that held. The Cuba program tests the same machinery when the relevant third countries are U.S. allies and their law protects non-compliance. Individual firms will likely find their Cuban business too small to risk their dollar access. Nonetheless, each program that forces allied firms to choose strengthens their incentive to reduce dollar exposure, and that exposure is the currency that all future U.S. economic sanctions programs depend on.

Brad Spicher is an intern with the Economics Program and Scholl Chair at the Center for Strategic and International Studies in Washington, D.C.