The sanctions target dealings with Cuba’s military-linked GAESA conglomerate and could cut companies off from the U.S. financial system.
WASHINGTON, DC — Foreign companies with ventures tied to Cuba’s government faced a Friday deadline to wind down certain business or risk U.S. sanctions, a move already shaking the island’s banks, hotels and tourism industry.
The deadline grew out of a May 1 executive order that broadened U.S. sanctions on Cuba and allowed penalties against non-U.S. companies and financial institutions. The Trump administration says the action targets Cuba’s military-linked business network. Cuban officials say the measures punish the country’s economy and worsen daily hardship.
The pressure centered on Grupo de Administración Empresarial S.A., known as GAESA, a Cuban military-run conglomerate with interests across tourism, finance, logistics and retail. The U.S. State Department designated GAESA on May 7, and the Treasury Department said foreign companies and financial institutions could wind down transactions involving GAESA or entities it controls through June 5. After that, they could face sanctions risk if they kept doing covered business. “The consequences for them would be the loss of access to the U.S. financial system entirely,” Michael Bustamante, chair of Cuban studies at the University of Miami, said in an interview with CBS News Miami.
Cuba’s Central Bank said this week that Visa and Mastercard transactions would be suspended starting June 6 after a foreign partner that handled card processing limited its operations. The bank said Cuba would be unable to receive income from sales of goods and services through those international cards. The transactions had been handled through a foreign bank and Fincimex S.A., a financial arm tied to GAESA. Visa and Mastercard did not immediately comment publicly on the change. The suspension threatened another blow to tourism, where visitors depend on international cards for hotels, restaurants and other services.
The sanctions have already pushed several hotel operators to reduce or leave their Cuban operations. Meliá, one of the largest foreign hotel operators on the island, said it would stop operating and marketing 15 of 35 hotels it oversaw in Cuba. Iberostar said it would stop operating and marketing 12 of 18 properties, while other operators, including Blue Diamond and Archipelago International, also moved to cut ties or leave management contracts. Many Cuban hotels are state-owned but managed or marketed by foreign chains, making the sector especially exposed to sanctions tied to state or military-linked entities.
The U.S. government says GAESA controls some of Cuba’s most valuable industries and helps direct profits toward the military and senior officials. Cuba denies that charge and says the conglomerate supports national development and public needs. The May 1 order also named sectors such as energy, defense, finance, mining and security as areas where foreign companies could face sanctions exposure. Treasury guidance said the order is separate from older Cuba sanctions rules, but it adds a new layer by allowing penalties against foreign persons who provide support to blocked Cuban entities.
The move marks a sharper use of what sanctions experts call secondary sanctions, which pressure foreign companies by threatening their access to the U.S. market or banking system. U.S. companies have long faced broad limits on business with Cuba, but the new order reaches beyond U.S. firms. Company leaders may also face personal consequences, including blocked assets or travel restrictions, if the government determines they meet the sanctions criteria. Treasury said companies unable to finish winding down GAESA-related transactions before the deadline should contact the Office of Foreign Assets Control.
In South Florida, the policy drew support from some Cuban Americans who said foreign investment has helped keep the communist government in power. Salvador Coppola, who said his family’s property was seized after he left Cuba in the 1960s, said he hoped the U.S. action would “wake up the people that are investing there and spending money there.” Bustamante said the policy would also hit ordinary Cubans. He questioned whether deeper hardship caused by U.S. pressure would bring the political results Washington seeks, and on what timetable.
The next test is enforcement. Treasury guidance said the government did not intend to target wind-down transactions through June 5, but it did not spell out how quickly penalties might follow for companies that remain. As of Friday, Cuba was preparing for the loss of international card processing while foreign hotel brands continued separating from state-linked properties.
Author note: Last updated June 5, 2026.