The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has suspended the use of the “Support for the Cuban People” (SCP) License Exception for exports or reexports to Cuba that involve the deposit of foreign funds in a Cuban-owned bank. This measure, effective Wednesday, March 4, 2026, directly impacts how sales of gas and petroleum products to Cuba’s private sector, including small and medium-sized enterprises (mipymes), are paid for and how funds are channeled.
Impact on Fuel Sales to Cuba’s Private Sector
BIS argues that there are “prolonged and documented” issues with diversion and commission charges associated with Cuban banking, and notes that several banks are on the Cuba Restricted List due to ties to military, intelligence, or security institutions. Washington believes allowing deposits into Cuban state-owned banks could generate revenue for or contribute to the operation of the Cuban state, which BIS states is contrary to the SCP’s goal of supporting “independent” economic activity in Cuba.
Specifically, the BIS determination suspends the availability of SCP § 740.21(b)(1) for any export, reexport, or transfer involving deposits into Cuban banks. The U.S. Government does not want these transactions paid for using Cuban banks when the payment involves bringing foreign currency into the island’s state banking system.
However, the suspension does not apply to exports, reexports, or transfers that do not involve Cuban banks, such as transactions using banks in third countries or “other payment systems” that avoid depositing foreign funds into Cuban banks.
BIS clarifies that, in general, a license is required to export/reexport gas and other petroleum products to Cuba, but exporters must evaluate if a license exception is available. The SCP License Exception may authorize exports/reexports for use by the private sector, including activities addressing humanitarian needs, if requirements are met.
Two pathways exist within SCP: § 740.21(b)(1) for goods destined for the private sector, with the caveat that SCP does not apply if the transaction primarily benefits the state; and § 740.21(b)(2) for products sold “directly” to individuals in Cuba for personal or immediate family use, with additional restrictions on prohibited recipients and government-linked entities.
Eric Martin, a spokesperson for the Department of State, specified that financial institutions in third countries, such as Spain and Panama, remain authorized for these purposes.
Frequently Asked Questions
What is the SCP License Exception?
The SCP License Exception is designed to support activity that empowers the Cuban people and promotes independence from the Cuban state.
Does this suspension affect all transactions with Cuba?
No, the suspension specifically applies to transactions involving the deposit of foreign funds in Cuban-owned banks. Transactions using banks in third countries or other payment systems are not affected.
What is the Cuba Restricted List?
The Cuba Restricted List includes banks with ties to Cuban military, intelligence, or security institutions.
How will these changes impact the flow of goods and services to Cuba’s private sector in the coming months remains to be seen. Businesses will adapt by utilizing alternative payment methods, but this could add complexity and cost to transactions. Analysts expect that the effectiveness of this measure will depend on the willingness of third-country banks to facilitate transactions and the Cuban government’s response.
