U.S. Treasury Sets Deadline for Foreign Entities to Sever Ties with Cuba's International Bank of Commerce

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued a regulatory clarification on Thursday, mandating that foreign individuals and international financial institutions must disentangle their associations with the Banco Internacional de Comercio, S.A. (BICSA) by November 14, 2026. This directive follows the sanctions imposed on the Cuban state bank by the State Department on the same day.

Labelled as FAQ 1276 on the OFAC website, this measure does not represent a lifting of sanctions nor does it grant permission for ongoing regular business dealings with BICSA. Instead, it provides a temporary reprieve specifically for activities that are "ordinarily incidental and necessary" to the divestment or conclusion of transactions with the bank or any entity where BICSA holds a 50% or greater interest.

This clarification holds importance for correspondent banks, businesses, and foreign financial counterparts with active ties to BICSA, allowing them time to orderly exit before the sanctions take full effect. OFAC clearly warns that any return of assets to the sanctioned entity or their movement to another jurisdiction for potential use by the sanctioned party could subject non-U.S. persons to significant sanction risks, as stated in the action published on October 15.

For those unable to complete the cessation process by November 14, OFAC directs them to its compliance hotline for guidance. A key aspect of FAQ 1276 is the differentiation between foreign persons and those under U.S. jurisdiction. For the latter—U.S. citizens, companies, and entities controlled by them—the temporary stance changes nothing: they remain prohibited from engaging with BICSA, even in the context of concluding operations of a foreign entity, unless specifically authorized by OFAC.

The only exceptions are for humanitarian and diplomatic transactions outlined in the Cuban Assets Control Regulations (CACR, 31 CFR part 515) and General Licenses 1 and 4A issued under Executive Order 14404. This clarification does not impact remittances or individual accounts of Cubans residing in the United States, which continue to be governed by a distinct and longstanding regulatory framework.

FAQ 1276 follows a consistent pattern applied by OFAC throughout 2026 whenever a Cuban state bank of systemic importance is designated, issuing a clarification that allows foreign counterparts roughly 30 days to arrange their exit. The Banco Financiero Internacional (BFI), the financial arm of GAESA, was sanctioned on June 23; Banco Exterior de Cuba was designated on September 3; and with BICSA, three major Cuban state banks have faced U.S. sanctions in less than four months.

BICSA's designation occurred as part of "Operation Economic Outcast," the Treasury's campaign against Iranian financial networks. According to the State Department, the Cuban bank has provided financial services to the Iranian Karafarin Bank—sanctioned since 2020—since at least 2022, leading to its inclusion on the Specially Designated Nationals and Blocked Persons List (SDN) under Executive Order 14404, signed by President Trump on May 1, 2026.

Foreign financial institutions with exposure to BICSA have less than 30 days to assess their situation and, if necessary, begin the closure process before the OFAC-imposed deadline expires.