Starting Point

For transactions involving diesel, gasoline, natural gas, LPG, LNG, fuel oil, jet fuel, crude oil, condensates, or other petroleum products destined for Cuba, it should not be assumed that a general OFAC license automatically authorizes the transaction. The most relevant OFAC authorization is often 31 C.F.R. § 515.533(a), but it only applies when the export or reexport is licensed or otherwise authorized by the U.S. Department of Commerce through BIS.

BIS authorizes the product, destination, end user, and end use. OFAC authorizes the incidental transactions associated with the export or reexport, including payments, transportation, insurance, documentation, and related services, provided that the underlying export or reexport is authorized by BIS.

OFAC's General Framework for Cuba

Sanctions relating to Cuba are primarily governed by the Cuban Assets Control Regulations (CACR), 31 C.F.R. Part 515. These regulations maintain broad prohibitions on transactions involving Cuba, Cuban nationals, or Cuban property/interests unless authorized by an exemption, general license, or specific license.

Accordingly, any Cuba-related transaction should be analyzed with respect to:

Most Relevant OFAC Authorizations

A. 31 C.F.R. § 515.533(a)

This is the most important OFAC authorization for exports or reexports to Cuba. It authorizes transactions ordinarily incident to an export from the United States or a reexport from a third country to Cuba, provided that the export or reexport is licensed or otherwise authorized by BIS.

In a fuel transaction, this authorization may cover, subject to compliance with all requirements:

Key Limitation

Section 515.533(a) does not itself authorize the export of fuel. The export or reexport must first be authorized by BIS. If the BIS authorization basis fails, the OFAC authorization basis may also fail.

Section 515.533(a) should not be relied upon if:

B. 31 C.F.R. § 515.534

This provision is particularly useful during the preliminary stage of a commercial opportunity.

What Does It Permit?

It authorizes the negotiation and execution of contingent contracts, provided that performance expressly remains conditioned upon obtaining all required OFAC, BIS, or other applicable federal authorizations.

It may apply to:

What It Does Not Permit

It does not authorize implementation of the transaction before obtaining all required approvals.

Accordingly, parties should not:

Recommended Clause for Preliminary Documents

This proposal and any obligation regarding supply, payment, shipment, title transfer, or the provision of services are expressly conditioned upon obtaining and maintaining all applicable authorizations, licenses, exceptions, banking approvals, sanctions clearances, and export control validations, including those required by OFAC, BIS, and any other competent authority. No party shall perform, pay, ship, transfer title, or provide services until written authorization has been issued by Legal/Compliance.

C. 31 C.F.R. § 515.584

This section may be relevant for payments, banking activities, and financing involving Cuba, provided the underlying transaction is authorized or exempt under the CACR.

In practice, it may be relevant for:

Important Point

Section 515.584 does not legalize an export lacking a valid BIS or CACR basis. It can only operate where the underlying transaction is already authorized.

D. 31 C.F.R. § 515.550

This regulation is relevant for maritime transactions, particularly when a vessel calls at Cuba and may subsequently enter U.S. ports. The regulation authorizes certain vessel-related transactions where trade with Cuba is authorized under the CACR, including under § 515.533 or a specific license.

For fuel trading transactions, the following should be reviewed:

Cuba General License 1 and E.O. 14404

In May 2026, OFAC issued guidance concerning Executive Order 14404, which established an additional sanctions program relating to Cuba that is separate from the CACR. The Executive Order contemplates additional risks for foreign persons operating, or having operated, in sectors of the Cuban economy including: energy, defense, metals and mining, financial services and security.

OFAC also issued Cuba-related General License No. 1, authorizing transactions otherwise prohibited under E.O. 14404 where those same transactions are already authorized or exempt under the CACR.

Cuba General License 1 does not create new authorization to sell fuel to Cuba. Rather, it confirms that transactions already authorized under the CACR are not separately prohibited by E.O. 14404.

Relationship with BIS and License Exception SCP

BIS generally requires a license for exports or reexports of gas and other petroleum products subject to the EAR to Cuba. However, BIS has indicated that certain petroleum products may be eligible under License Exception SCP, provided all requirements are satisfied.

SCP may be relevant where the product is intended for:

However, SCP should not be used where the fuel:

In addition, beginning March 4, 2026, BIS suspended the use of SCP § 740.21(b)(1) for transactions involving the deposit of foreign funds into a Cuban-owned bank.

Operational Impact

If a transaction depends upon SCP § 740.21(b)(1) and payment will be deposited into a Cuban bank, the transaction should immediately be placed on STOP/HOLD status.

Principal OFAC Risks in Cuba Transactions

Sanctioned or Blocked Parties

All parties must be screened against the SDN List, non-SDN sanctions lists, and other applicable sanctions databases. The OFAC 50 Percent Rule must also be applied. Under that rule, an entity owned 50 percent or more, directly or indirectly, by one or more blocked persons is itself considered blocked even if not specifically listed.

At a minimum, screening should cover:

Cuba Restricted List

OFAC restricts certain direct financial transactions involving entities listed on the Cuba Restricted List, which contains entities affiliated with Cuba's military, intelligence, or security sectors.

This is particularly important because fuel transactions may involve:

If any party appears on the Cuba Restricted List, the transaction should be placed on HOLD pending Legal/Compliance review to determine whether an authorization, exception, or rejection is appropriate.

Cuban Banks

The use of Cuban banks presents a critical risk, particularly when a transaction seeks to rely upon SCP § 740.21(b)(1). BIS has suspended that exception for transactions involving deposits of foreign funds into Cuban-owned banks.

Accordingly, transaction files should document:

State or Military End User

Where SCP is used as the BIS basis and § 515.533(a) is relied upon under OFAC, the parties must demonstrate that the fuel will not primarily benefit the Cuban government, a state enterprise, the military, intelligence services, or security organizations.

It is insufficient for a buyer merely to claim that it is "private." Evidence should establish:

Concealment, Structuring, or Sanctions Evasion

Any attempt to alter or conceal material information should be treated as a critical red flag, including:

Such conduct may transform a commercial transaction into a potential sanctions-evasion matter.

Transaction Roadmap

Before issuing a binding quotation, entering into a contract, financing, shipping, or providing services, there should be documented answers to the following questions:

Official Sources