Spanish Firms Reflect on Risks in Cuba Post-Sanctions
Spanish businesses operating in Cuba are reportedly evaluating the risks associated with remaining in the country following the recent U.S. sanctions imposed on GAESA, which is a tourism conglomerate linked to Cuba’s communist government.
GAESA (Grupo de Administración Empresarial SA) is managed by the military and controls around 40% of Cuba’s economic activities. This group oversees the country’s tourism sector, a vital income source for the regime. Tourism is among the few areas where the regime is willing to invest considerable resources. Beyond tourism, GAESA also manages significant income sources, which include remittances and a controversial program involving Cuban doctors working abroad.
Last week, the Trump administration sanctioned GAESA and its president, Ania Guillermina Lastres Morera. Secretary of State Marco Rubio labeled the conglomerate as “the center of Cuba’s bandit communist system,” highlighting that GAESA is thought to hold approximately $20 billion in illegal assets, three times the entire state budget of Cuba.
A Spanish newspaper reported on Tuesday that the new sanctions have compelled Spanish companies, particularly in the tourism and finance sectors, to reconsider their operations with GAESA-affiliated organizations. These sectors are most vulnerable to repercussions from working with sanctioned entities, which could lead to asset seizures and fines, complicating their ability to operate in U.S. dollars.
Citing data from the Spanish Institute for External Trade (ICEX), the newspaper noted that Spanish firms jointly manage about 30,000 hotel rooms in Cuba, with 3,000 of those under mixed Spanish-Cuban management. The remaining properties are run under contracts with established hotel chains such as Melia, Barceló, and Iberostar. Melia alone manages over 14,000 rooms across 34 hotels in Cuba.
Rubio warned that U.S. citizens cannot conduct business with GAESA due to the sanctions, and non-U.S. nationals may also face risks if they engage with sanctioned Cuban individuals or entities.
An anonymous source from the Spanish business sector described the situation as “very delicate,” indicating that some companies must now weigh the potential consequences of continuing operations in Cuba. A law firm source corroborated that businesses are seeking legal advice to navigate these risks.
José María Viñals, a partner at an international law firm, noted that this presents a significant legal shift, with the U.S. now equipped with tools to enforce sanctions if necessary. He added that banks and other partners might increase scrutiny when engaging in business in Cuba, prompting companies to reconsider whether their operations are worth the associated risks.
Ignacio Aparicio, who leads the Cuba desk at a California-based services firm, raised concerns over the legitimacy and continuity of contracts with GAESA. He mentioned worries about personal risks for executives traveling to the U.S. and the implications for banks and insurance institutions handling transactions with sanctioned firms. He speculated that Spanish companies might gradually withdraw from Cuba, but a total exit isn’t anticipated.
Aparicio emphasized that these concerns are not trivial or merely legal; they’re substantial and could impact business decisions moving forward.
In addition to targeting GAESA, the U.S. has also imposed sanctions on More Nickel SA (MNSA), a Cuban mining company accused of exploiting national resources for the regime’s benefit, often at the expense of the populace. Following the sanctions on More Nickel, the Canadian mining company Sherritt announced its exit from Cuba after years of operations.
According to an expert in Cuban economics, the suspension of Sherritt effectively targets all of Cuba’s primary currency sources.
