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3w ago

Foreign Firms Pull Out of Cuba After U.S. Broadens GAESA Sanctions

The exits risk collapsing Cuba’s tourism earnings with wider effects on shipping, fuel supplies and access to finance through Gaviota management takeovers.

People are reflected in a window of the Central Palace of Computing and Electronics bearing images of late Cuban President Fidel Castro and his brother, former President Raul Castro, who was indicted in the United States in a move that marks an escalation in Washington's pressure campaign against the Caribbean island's communist government, in Havana, Cuba May 20, 2026. REUTERS/Norlys Perez/File Photo
Foreign company departures are wreaking havoc on Cuba's already devastated economy
2026 has been the worst year for Cuba's economy in 70 years, one economist says
The US government has targeted GAESA, a conglomerate controlled by Cuba's military

Overview

  • Several major hotel operators have announced withdrawals or sharp cutbacks, with Archipelago ending Aston-brand operations and Blue Diamond and Iberostar pulling back, in moves reported on Tuesday that follow a May 1 U.S. executive order widening sanctions on GAESA.
  • The U.S. order gives foreign firms a near-term compliance window that OFAC set to close on Friday, and it threatens secondary penalties for companies that continue commercial ties with GAESA-controlled entities.
  • Shipping lines CMA CGM and Hapag-Lloyd have suspended bookings and some airlines have cut or halted flights, creating immediate supply and fuel bottlenecks that hurt imports and tourism logistics.
  • Industry sources say many hotels are likely to transfer management to Gaviota, the GAESA-linked tourism firm, rather than shut, a shift that would keep properties operating while routing revenue to military-run structures.
  • Cuban leaders have publicly defended GAESA as vital to the economy, while economists warn the corporate exodus and an ongoing fuel squeeze have produced a steep decline in visitors and severe short-term hardship for workers and services.