On January 11, 2021, the U.S. State Department re-designated Cuba as a State Sponsor of Terrorism (SST), just six years after the Obama administration had removed Cuba from the SST List. Because of its SST status, Cuba is now ineligible to receive U.S. foreign aid, munitions, and certain dual-use items. Practically speaking though, this re-listing is unlikely to have a significant practical impact, as Cuba has long been subject to a comprehensive embargo.
Following this action, on January 15, the Trump Administration designated the Cuban Ministry of Interior and its leader, Lazaro Alberto Álvarez Casas, under Executive Order 13818 which builds upon and implements the Global Magnitsky Human Rights Accountability Act. The Ministry of Interior and its leader were already “blocked” as part of the United States embargo on Cuba, but this designation under these Global Magnitsky sanctions mean that non-U.S. persons who engage in certain transactions with the Ministry of the Interior or its leader, or any entity they own 50 percent or more, now face a risk of sanctions.
Cuba was first designated as an SST in 1982 following its support for revolutionary groups in Latin America and Africa. In an attempt to ease relations with Cuba, President Barack Obama lifted the designation in 2015. The decision to relist Cuba as an SST follows President Trump’s tightening of the Cuban sanctions that the Obama Administration had attempted to ease. In a press release announcing the designation, the State Department accused Cuba of “repeatedly providing support for acts of international terrorism in granting safe harbor to terrorists,” citing Cuba’s support for Venezuelan President Nicolas Maduro and its refusal to comply with extradition requests. The three other countries that are currently listed as SSTs are Iran, North Korea, and Syria. President Trump announced last year that the United States was removing Sudan from the SST list and this was officially done on December 14, 2020.
Despite the dramatic tones of the terrorism listing, the practical and economic effect is likely to be relatively muted. The U.S. trade embargo, imposed pursuant to a variety of statutes and implemented by the Cuban Assets Control Regulations, already bars most trade between the United States and Cuba and adding the new terrorism sanctions to the existing trade embargo is like bringing sand to the beach. Certain exemptions, like those for agricultural commodities, as well as the exemption for the 180-day rule for foreign vessels calling at Cuba are unaffected for now. With respect to export controls, typically an SST designation triggers the 10 percent controlled content threshold for purposes of jurisdiction over non-U.S. goods which have incorporated U.S.-origin components. However, that threshold was already reduced by the Trump Administration back in October 2019.
Implemented in the Trump Administration’s remaining days, the effect of the designation is likely to be symbolic. How far the pendulum will swing under the incoming Biden Administration is another intensely anticipated policy question to be answered in the coming weeks and months.