Dubai Telegraph - Foreign companies take flight from US-sanctioned Cuba

The departures are wreaking havoc on Cuba's already devastated economy, as the island creaks under the weight of an energy blockade imposed in January by the United States, which has piled on further sanctions since then.

As President Donald Trump openly muses about seizing control of the island, his administration has notably targeted GAESA, a major player in the Cuban economy.

An executive order issued on May 1 froze the conglomerate's US assets and penalized foreign companies that work with it.

These companies have until Friday to adjust their activities, according to the US Office of Foreign Assets Control (OFAC).

A flurry of departures and suspended activities in recent weeks suggests that the warning has worked.

"The short-term impact on the Cuban economy of all these international companies leaving is devastating," Cuban economist and consultant Daniel Torralbas told AFP.

2026 has been "the worst year in Cuba's economic history in the past 70 years," he added.

- Retreat -

Sanctioned companies could have their assets frozen or encounter difficulties in accessing the international financial system.

The Canadian hotel group Blue Diamond Resorts, a major player in Cuba's tourism sector, said Monday it had shut down operations on the island, citing difficult tourism conditions without explicitly referring to US sanctions.

Spanish hotel group Iberostar was withdrawing from a dozen Cuban facilities it managed in partnership with GAESA-linked companies, several sources told AFP on Tuesday.

The group had decided to "pull out of the hotels it managed with the tourism group Gaviota," which is part of GAESA, according to one source.

"As of June 1, Iberostar is pulling out of all its hotels (run with) Gaviota," another tourism industry source confirmed.

The Mallorca-based group, which declined to provide details when contacted by AFP, will continue to co-manage hotels owned by Cuba's tourism ministry, the sources added.

Two more hotel groups, Spain's Melia and Indonesia's Archipelago International, are also considering reducing activities or withdrawing completely from Cuba, sources said.

Two European shipping companies, France's CMA CGM and Germany's Hapag-Lloyd, meanwhile announced the temporary suspension of freight bookings to Cuba, citing Trump's executive order.

On May 7, Canadian mining company Sherritt announced its departure from Cuba, where it has mined nickel and cobalt in a joint venture with state-owned General Nickel Company S.A. since the 1990s.

- 'Slander' -

US Secretary of State Marco Rubio, a Cuban-American and Havana's fiercest critic, has accused GAESA of enriching the elites at the expense of ordinary citizens.

"A 'state within the state' that is accountable to no one and hoards the profits from its businesses for the benefit of a small elite," he said.

Havana hit back at the allegations on Tuesday, insisting the conglomerate was created as a necessary counterbalance to the US trade embargo dating to 1962.

It called the measures "the most intense, disproportionate, and dangerous escalation in the recent history of relations between Cuba and the United States."

It said GAESA's "countless" services included sustaining the economy during the Covid-19 pandemic and building more than 10,000 homes.

Its work "speaks for itself, and it does so above the state slander concocted in Washington," the statement added.

D.Farook--DT