The U.S. Department of Commerce, through its Bureau of Industry and Security (BIS), has announced a suspension on the use of the License Exception "Support for the Cuban People" (SCP) for transactions related to exports or reexports to Cuba that involve depositing foreign funds in Cuban-owned banks.
This decision directly impacts the method of payment processing for gas and petroleum product sales intended for the private sector on the island, including small and medium-sized enterprises. The suspension is effective as of Wednesday, March 4, 2026.
BIS's documentation highlights "long-standing and documented issues" related to diversion and commission charges associated with Cuban banking. It emphasizes that several banks are on the Cuba Restricted List due to their connections with military, intelligence, or security institutions.
From this perspective, Washington argues that allowing deposits in Cuban state banks could generate revenue or support the operation of the state apparatus, which is contrary to the purpose of SCP, designed to foster "independent" economic activity in Cuba.
Impact on Private Sector Fuel Sales
The BIS ruling specifically suspends the availability of SCP § 740.21(b)(1) "for any export, reexport, or transfer (in-country) involving the deposit of foreign funds into a Cuban-owned bank."
Essentially, this notice makes it clear that the U.S. does not want these transactions processed through Cuban banks if it means injecting foreign currency into the island's state banking system.
BIS clarifies that this suspension does not apply to exports/reexports/transfers that do not involve Cuban banks, such as transactions using third-country banks or "other payment systems" that do not require depositing foreign funds into Cuban banks.
Transition Period for "In-Route" Shipments
The document also includes a transitional clause: the suspension does not apply to exports or reexports that were already in transit as of March 4, 2026, to an export or reexport port, provided the operation is based on actual orders and is completed by April 3, 2026.
In an "updated guidance" section, BIS explains that, generally, a license is required to export/reexport gas and other petroleum products to Cuba under the applicable regulations. However, it reminds exporters to assess whether a license exception is available.
Within this framework, BIS states that if requirements are met, the SCP License Exception can authorize exports/reexports of these products for private sector use, including activities addressing humanitarian needs.
The document outlines two pathways within SCP:
§ 740.21(b)(1): for goods destined for the private sector and private economic activities, with the caveat that SCP does not apply if the transaction primarily generates income for the state or contributes to its operation.
§ 740.21(b)(2): for products sold "directly" to individuals in Cuba for immediate personal or family use, with additional restrictions on prohibited recipients and government-linked entities (including those on the Cuba Restricted List).
BIS's message implies that fuel for the Cuban private sector may be eligible for authorizations under the SCP License Exception.
However, it draws a firm line on the financial mechanism by suspending the use of SCP when the transaction involves depositing foreign funds into Cuban banks, steering payments toward channels that bypass the Cuban state banking system.
Regarding this, Eric Martin, spokesperson for the State Department, clarifies that financial institutions from third countries (such as Spain, Panama) remain authorized for these purposes.
Understanding the Impact of BIS's Fuel Sales Ruling
Why did the United States suspend the use of Cuban banks for fuel transactions?
The suspension was enacted due to documented concerns about diversion and commission charges linked to Cuban banks, which are often associated with military and security institutions. Allowing deposits could inadvertently support the Cuban state apparatus, which goes against the objectives of fostering independent economic activity in Cuba.
What alternatives do businesses have for processing payments?
Businesses can use financial institutions from third countries, such as those in Spain or Panama, or other payment systems that do not involve depositing foreign funds into Cuban state banks. These alternatives remain authorized for fuel transaction payments.
Does the suspension affect all types of exports to Cuba?
No, the suspension specifically targets transactions involving Cuban banks. Exports, reexports, or transfers that do not utilize Cuban banks are not affected, allowing businesses to continue operations through authorized channels.