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8 - The Impact of US Sanctions on Cuba’s Economic Development

from Part I - Humanitarian Consequences

Published online by Cambridge University Press:  28 November 2025

Joy Gordon
Affiliation:
Loyola University, Chicago

Summary

Cuba’s current economic struggles are due to a number of factors. These include an economic structure resulting from colonialism and neocolonialism and Cuba’s geopolitical alliance with the Soviet Union, which had mixed results in terms of economic performance. In the twenty-first century, there have been attempts in Cuba at market-oriented structural reforms, without a great deal of success. Thus far, these reforms have not shown major significant macroeconomic effects. However, it cannot plausibly be denied that Cuba’s post-1959 development strategy has been severely impacted by the system of unilateral economic sanctions imposed by the US. The US’s system of unilateral coercive economic sanctions disrupts Cuba’s international economic relations by making it expensive and risky for other countries to do business with the island and causing Cuba’s investment in infrastructure to perform below expectations. Sanctions create obstacles to accessing new technologies and foreign direct investment for key sectors of the Cuban economy, such as biotechnology and tourism, both of which are important elements of Cuba’s development strategy. Consequently, the US system of unilateral coercive measures affects Cuba’s overall economic health, has inflicted considerable damage to the Cuban population, and has interfered in many ways with the realization of Cuba’s development goals, violating the island nation’s right to development.

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Type
Chapter
Information
Economic Sanctions from Havana to Baghdad
Legitimacy, Accountability, and Humanitarian Consequences
, pp. 153 - 168
Publisher: Cambridge University Press
Print publication year: 2025
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This content is Open Access and distributed under the terms of the Creative Commons Attribution licence CC-BY-NC 4.0 https://creativecommons.org/cclicenses/

8 The Impact of US Sanctions on Cuba’s Economic Development

Introduction

Unilateral economic sanctions have been used as a foreign policy tool by the US government against Cuba for more than six decades. The US system of economic sanctions on Cuba are the most comprehensive and enduring system of unilateral coercive economic sanctions that the US has ever imposed on an independent state. Every major method of sanctions has been employed: trade control; suspension of aid and technical assistance; freezing of financial assets;Footnote 1 and most recently, the blacklisting of foreign companies that do business with Cuba. Blacklisting did not begin with Trump’s first administration, but it became an important tool like for no other administration. Consequently, the sanctions bring about broad damage to the country’s economy and its ability to maintain and develop its infrastructure, access technology, and obtain foreign direct investment, among other development requirements.

The economic measures against Cuba began shortly after the Cuban Revolution of 1959. When the Eisenhower administration cut the Cuban sugar quota in the US market in July 1960,Footnote 2 it was easy to anticipate what kind of impact a measure like that would have on a small, underdeveloped island, whose main export was precisely sugar, and was heavily dependent on the US’s market for its exports and imports. Successive Cuban governments ever since have sought to diversify the island’s international economic relations, in an effort to move past the model of economic dependence rooted in a history of colonialism and neocolonialism, toward a different model of development. However, Cuba is still unable to meet its needs for investment capital, technology, energy, manufactured goods, and food.

Cuba’s current economic struggles are due to a number of factors. These include an economic structure resulting from colonialism and neocolonialism, characterized by a high dependence on one export crop and mineral resources, and the underdevelopment of Cuba’s industrial capacity. In addition, Cuba’s geopolitical alliance with the Soviet Union had mixed results in terms of economic performance. In the 1970s, Cuba transitioned to a modified Soviet-style economy, with an inefficient centrally planned economic system and deep state dominance over the market and nonstate property. In the twenty first century there have been attempts at market-oriented structural reforms, but they happened very slowly, and without a great deal of success. The reforms were plagued with problems, including disincentives, such as excessive taxes. Thus far, these reforms have not shown any significant macroeconomic effects.

Some government efforts, such as the unification of the currency and exchange rates in early 2021, should in the long-term yield positive results. But in the short term, this has aggravated many of the problems in the economy, including a huge increase in inflation and a notable rise in the price of goods.

However, there is no doubt the US economic sanctions, which in many regards function as a blockade, have been profoundly detrimental to Cuba’s overall economic development.

The US’s UCMs disrupt Cuba’s international economic relations by making it expensive and risky for other countries to do business with the country and causing Cuba’s investment in infrastructure to perform below expectations. Sanctions create obstacles to accessing new technologies and foreign direct investment for key sectors of the Cuban economy, such as biotechnology and tourism, both of which are important elements of Cuba’s development strategy.

Cuba’s Development Strategy and US Economic Sanctions

In the context of the post-World War II international order, the Cold War, and the impact of US unilateral economic sanctions, Cuba strategically turned to the Soviet Union in the early 1960s for economic support, and was fully integrated into the Soviet Bloc in the early 1970s. To some extent, this move helped Cuba mitigate the impact of the US’s economic sanctions, as the needs for energy, technology, and manufactured goods were met by the socialist bloc, and Cuba enjoyed favorable terms of trade and a market for its main exports. In 1989, Cuba exported 63 percent of its sugar, 73 percent of its nickel, and 95 percent of its citrus to the Eastern bloc; and imports from those countries represented 86 percent of Cuba’s total imports: 98 percent of fuel and lubricants, 80 percent of machinery and equipment, and 57 percent of chemical products.Footnote 3 This did, however, generate a high degree of dependence on the Soviet Union and the socialist bloc up to 1991.

In the early 1990s, Cuba lost almost all of its preferential terms of trade with the Soviet Union – led eastern European bloc, and a severe economic crisis ensued. By 1993, GDP had fallen by 35 percent, imports had been reduced by 78 percent, the fiscal deficit reached 33.5 percent of GDP, and fuel consumption was cut in half.Footnote 4 Consequently, the Cuban state sought to redefine its development strategy by introducing economic reforms and diversifying its international economic relations through joint ventures with foreign companies and relations with a broad array of new trade partners.Footnote 5 However, those efforts have been undermined by the US sanctions.

The “U.S. embargo of Cuba” is a combination of statutes and regulations that have been modified over time.Footnote 6 The most important modifications were added in the 1990s, during Cuba’s economic crisis; the economic sanctions came to be the core element of US foreign policy toward Cuba, and the policy of seeking regime change. Two pieces of legislation were passed by the U.S. Congress: the Torricelli Act of 1992 and the Helms–Burton Act of 1996, which codified the sanctions in a way that stripped the president of the right to lift or modify major parts of the system of sanctions. At present, only a vote by Congress can revoke these Acts.

The Cuban Democracy Act (the Torricelli Act), was introduced by New Jersey Democrat Robert Torricelli in 1992.Footnote 7 The stated purpose of this bill was to “promote a peaceful transition to democracy in Cuba through the application of appropriate pressures on the Cuban government.”Footnote 8 The Torricelli Act incorporated extraterritorial measures, affecting third party relations with Cuba by making clear that the US government would “seek the cooperation of other democratic countries in this policy” and making “clear to other countries that, in determining its relations with them, the United States will take into account their willingness to cooperate in such a policy […]”Footnote 9 Torricelli claimed his bill would “wreak havoc on that island.”Footnote 10 Indeed, the law affects Cuba’s access to shipping; its major exports, such as sugar and nickel; and its global trade with companies that are subsidiaries of US companies. These measures have done much to compromise Cuba’s economic development and ability to meet the basic needs of the population.

One of the most damaging provisions was the elimination of licenses to foreign subsidiaries of US companies that were exporting to Cuba. In 1991, prior to the adoption of this legislation, Cuba imported $719 million worth of goods from US subsidiary companies; 90 percent of this amount was used for food and medicine. But from 1992 to 1995, in response to Cuban government requests to purchase hundreds of millions of dollars’ worth of food and medicine,Footnote 11 a total of only $0.3 million in goods was licensed for sale by the Treasury Department.

In principle, the statute authorizes exceptions for the sale of medical supplies and medicines. But the statute requires end user verification requirements for these goods. In practice, end user verification is almost impossible; and as a result, many medical supply companies avoid doing business with Cuba altogether. This continues to be a significant problem. For example, from January to July 2021, the Cuban state agency charged with importing medical goods, MEDICUBA S.A., contacted sixty-five US companies to inquire about the possibilities of importing medicines, equipment, devices, and other supplies necessary for the care of the Cuban people in the national public health system. Of these, fifty-six companies did not respond to the Cuban entity’s requests, while three responded negatively, even though medical sales are ostensibly permitted under US law.Footnote 12

The Helms–Burton law of 1996 is as far reaching as the Torricelli Act. Title I of the Act affects Cuba’s access to international institutions such as the World Trade Organization (WTO) and international financial institutions (IFIs), such as the World Bank: the statute mandates the US representative in the IFIs to oppose the admission of Cuba, and to withhold US payments to the IFIs should they approve assistance to Cuba over US opposition. There are some avenues for Cuba to have a limited engagement with leading IFIs. However, decisions regarding funding and membership are determined by weighted voting, and the US holds far more voting power than any other countries. As a result, the institution effectively reflects the position of the US in the context of Cuba.Footnote 13 And development assistance to Cuba from the US government is also denied by US law.Footnote 14

Title III is deeply consequential for Cuba, and among sanctions regimes, it is also unique. Under Title III, all expropriated and nationalized Cuban property is considered to be “stolen,” and consequently, trading with goods manufactured on or by this property or investing in a “stolen property” is deemed illegal by the US, regardless of the nationality of the “perpetrator.” Under this statute, it is possible for US citizens and Cuban (naturalized US citizens) individuals and companies to bring civil actions for damages before US courts against any person that is doing business with products nationalized during the Cuban Revolution. Thus, in effect, the statute authorizes suit by a (former) foreign national, against a foreign company or person, for an action that took place in a foreign country. This is considered to be “extraterritorial,” in violation of international commercial law, and has consistently been broadly condemned by the international community.

In response to this opposition, the enforcement of Title III was suspended by successive administrations for thirty years. However, it was activated by President Donald Trump on May 2, 2019; and the Biden administration continued to leave this policy in place. This has triggered dozens of lawsuits in the US courts against international companies that conduct business activities in Cuba, with negative consequences for the island’s development plans. Plaintiffs filed roughly forty suits under Title III within the first two years it became operative, including fifteen new suits against a mix of American, European, and Cuban companies operating in industries such as mining, sugar, tobacco, advertising, banking, construction, and ranching. Of all these suits filed, seventeen have already been dismissed in whole, five voluntarily and twelve by court order. However, this does have a chilling effect on potential foreign investors in Cuba.Footnote 15 For example, there are European companies that have preferred to withdraw from business relations with Cuba rather than fighting potential lawsuits in US courts, even though the EU provides some protections against these suits.

Such is the case of the French–Italian company, Avions de Transport Régional, which had signed a contract with the Cuban government for the sale of two ATR 72–600 turboprop aircraft. Another of the canceled projects has been the renovation of the Cuban railway repair facilities, for which a contract had been signed by the National Society of French Railways and the Union of Cuban Railways, with a value of $46.7 million. The project included the modernization of two large locomotive repair facilities in Havana and Camagüey, as well as restoring passenger cars and putting into operation the one known on the island as the “French train.”Footnote 16

In addition to the Torricelli and Helms–Burton laws, in 2000 one new piece of legislation was added to the sanction’s regime, the Trade Sanctions Reform and Export Enhancement Act.Footnote 17 In principle, it provided for humanitarian exemptions, such as food. However, food sales are only allowed on terms that are adverse and costly to Cuba, such as prohibiting the use of US dollars for these transactions. In addition, the statute prohibits vendors from extending credit for these humanitarian sales; Cuba is required pay for these goods in cash and must pay in advance.Footnote 18 All of these requirements worsen Cuba’s cash flow and impose additional pressure on the country’s economy.

If the US simply adopted a policy of bilateral suspension of trade and aid, it would be less detrimental to Cuba’s development strategies and a lesser infringement on Cuba’s right to development. However, the US’s economic sanctions regime is structured to constrict Cuba’s trade with third countries, in part by generating a chilling effect that creates obstacles to much needed foreign investment, as well as trade and even humanitarian aid, affecting the economic development of the whole nation. In that case, as Joy Gordon rightly points out, the US sanctions of Cuba bring about negative development.Footnote 19

There are also other measures that are not designated as sanctions proper, but have the same effect, such as designating Cuba as a state sponsor of terrorism. This unilateral designation also makes Cuba a target for additional disruption, especially in the financial sector, and promotes increased scrutiny for US-based companies if they engage in dealings with Cuba. Even for transactions that are clearly permitted under US law, companies and banks can now expect inquiries from the Office of Global Security Risk within the US government’s Securities and Exchange Commission for Cuba transactions.Footnote 20 In addition, the Treasury Department restricts the use of the dollar in targeted states such as Cuba by enforcing strict rules on banks throughout the world. Between August 2021 and February 2022, a total of 100 foreign banks were involved in 261 enforcement actions that included: “closing bank accounts and [terminating] established banking contracts, returning transactions, refusing to create accounts, [and] canceling passwords for the exchange of financial information through the Society for Worldwide Interbank Financial Telecommunication (SWIFT).”Footnote 21

The Cuban government estimates that these measures affected some $260 million in transactions within the banking and financial sector.Footnote 22 There were numerous incidents that resulted from these enforcement actions, or from banks and other entities terminating ties with Cuba even for transactions that are legal. For example, in 2021, the Société Générale Bank closed the accounts of the permanent delegation of Cuba to UNESCO and the Cuban Embassy to the French Republic, which has substantially affected the normal functioning of both diplomatic offices.Footnote 23

Impact of Sanctions on Cuba’s International Trade and Infrastructure

The United Nations Conference on Trade and Development’s (UNCTAD) contribution to the “Report of the UN Secretary-General: Necessity of Ending the Economic, Commercial and Financial Embargo Imposed by the United States of America against Cuba” concludes that:

[the] essential elements of the embargo remain in force and continue to restrict a healthy development of commercial relations between the two neighboring countries. This continues to be a matter of concern to Cuba as trade plays a crucial role in its economy. To date, the embargo has frustrated the country’s efforts to use trade as an instrument of sustainable development, including through further expansion of promising tourism and professional services exports, as well as the productive use of remittances. This is all the more significant in light of the 2030 Agenda for Sustainable Development and the SDGs which profile international trade as an essential means of implementation and call for significantly increasing the exports of developing countries under its target.Footnote 24

One clear example of how the economic sanctions imposed by the US government affect Cuban development is the Port of Mariel and the Special Development Zone, where foreign companies, or joint enterprises, may set up manufacturing facilities, warehousing and other logistics on preferential terms. This constitutes the single largest infrastructure investment in Cuba in the last sixty years. The area has a modern container terminal and the capacity to handle super-post-Panamax and neo-Panamax vessels, among the largest commercial ships in the world. A number of major shipping lines offer scheduled services to the Port of Mariel, including Melfi Marine, Maersk Line, MSC, CMA CGM, Hamburg Sud, Hapag Loyd, ZIM Line, COSCO, Evergreen, Crowley Marine, and Nirint Shipping. The position of the port is considered strategic since it is within a 1,000-mile radius of thirty-two ports in eleven countries. The Port of Mariel could become to become a transshipment hub for the region, among other activities. But US sanctions are the biggest hurdle to increasing Mariel’s transshipment business. US law dictates that a vessel, regardless of flag, cannot call at a US port within 180 days of calling in Cuba.Footnote 25 This effectively prevents transshipment from Mariel, because any vessel that loads or unloads cargo would lose the flexibility to enter a US port for several months. More importantly, mainline vessels cannot sail to final destinations in the US after dropping off transshipment cargo (bound for non-US destinations) in Mariel.

In addition to the sanctions measures directly concerning shipping, the impact of the activation of Title III of the Helms–Burton Act has been felt very strongly in the Mariel Special Development Zone (ZEDM), as lawsuits directed against US companies – operating legally in the port – were filed in US courts.Footnote 26

Other Impacts on Cuban International Trade

The US sanctions against Cuba have not only blocked its access to US markets but also intervene in Cuba’s trade with third countries, its international financial transactions, and its access to foreign investment, as well as disrupting exports and imports, impacting the entire Cuban economy.

The Cuban government has developed a method to quantify the cost of disruption of its foreign trade by sanctions.Footnote 27 For example, because of the sanctions, Cuba has had to engage in commerce with trade partners in distant regions. This has caused significant losses. In 2020, the cost overruns for freight and insurance alone were calculated to be $85,108,797.Footnote 28 However, it is not possible to measure the full extent of the time-consuming efforts that Cuban state companies have to go through to find trade partners, and circumvent both the extraterritorial reach of the sanctions and the chilling effect generated additionally by the designation of Cuba as a state sponsor of terrorism.

US sanctions greatly impact Cuba’s exports, including nickel and cobalt. Cuba has one of the world’s largest reserves of nickel and cobalt. According to Global Data, Cuba was the world’s sixth-largest producer of cobalt in 2022.Footnote 29 Cuba’s primary source of cobalt is the nickel mine at Moa, located in Holguín province. The Moa operation is a joint venture undertaken between Sherritt International of Canada (50 percent) and the General Nickel Company of Cuba (50 percent). Combined with a Sherritt refinery in Canada, this facility produces 15 percent of the world’s cobalt, with an extremely high purity rate of 99.98 percent.Footnote 30

Both are strategic goods: nickel is used in producing stainless steel, while cobalt is used to produce batteries. As the world moves more towards electric vehicles and power tools, these exports are major assets for Cuba; Cuba is the ninth largest exporter of nickel in the world. US sanctions not only prevent Cuban nickel from entering the US, but also interfere in Cuba’s exports to non-US countries: the Helms–Burton Act prohibits any foreign company from selling goods in the US that contain even trace amounts of Cuban materials, including nickel and cobalt. Currently, the main destination of nickel exports from Cuba are China and Japan.Footnote 31 In July 2018, Tesla, a US electric car-maker, informed Panasonic, their exclusive supplier of batteries, that Tesla could not buy batteries containing cobalt that was mined in Cuba. As a result, the Japanese electronics manufacturer has suspended business with Sherritt.Footnote 32 A Panasonic spokesperson said that Panasonic was unable to discern how much cobalt sourced from Cuba via its Canadian supplier ended up in batteries it provided to the US market. After seeking guidance from the Treasury Department’s OFAC regarding its interpretation of the scope of the ban on Cuban-origin imports, Panasonic withdrew from its business relations with Sherritt.Footnote 33 This was not only an economic blow to Sherritt, but also to Cuba which, as Sherritt’s partner in the Moa operations, lost 50 percent of the potential profits from sales to Panasonic. This is just one among many examples of how sanctions imposed by the US affect third countries, which cannot buy Cuban raw materials such as nickel and cobalt, two of the country’s major exports, without losing access to the US market or risking severe penalties from the Treasury Department.

The Impact of US Sanctions on Cuba’s Tourism

The Caribbean Sea has become the main hub for cruise tourism in the world. In recent years, the region surpassed the Mediterranean by a wide margin as the most important market for this kind of tourism.Footnote 34 Cuba’s economic development depends upon being able to capitalize on this market. Tourism is Cuba’s second leading source of revenue, totaling $2.645 billion in 2019. This sector constitutes 10 percent of the country’s GDP and generates half a million jobs in the public and private sectors. Thus, tourism has a major role in Cuba’s development strategy. It is also a target of several types of US sanctions.

It has long been the case that US sanctions prohibit US nationals from traveling to Cuba as tourists.Footnote 35 Travel restrictions were loosened under Barack Obama by extending general licenses, and US travelers to Cuba increased from 91,254 in 2014 to 637,907 in 2018.Footnote 36 As travel restrictions were reinstated under the Trump administration, the number of US visitors declined again.Footnote 37

But the most significant recent development regarding the impact of sanctions on Cuban tourism can be seen in the lawsuits under Title III of the Helms–Burton Act in US courts against major hotel chains with investments or joint ventures in Cuba. These include Melia International Hotels and Iberostar from Spain; and lawsuits against companies such as Trip Advisor, Orbitz, Cheap Tickets, and Kayak, as well as the Dutch company Booking.com, have been filed in the federal court in Delaware. The plaintiff in one of these suits claims to be the heir of nationalized land in Varadero, where there are hotels operated by the companies Iberostar, Meliá, Blau, and Starfish. Online reservation companies, such as Trip Advisor and Orbitz, are named as defendants because they list these hotel companies in their databases.Footnote 38

The tourist sector has already been impacted by one of the recent rulings under Title III. On March 2022, a Miami U.S. District Court judge ordered Carnival, Norwegian, Royal Caribbean, and MSC SA, all Florida-based cruise lines,Footnote 39 to pay more than $400 million in damages for the use of Cuba’s port from 2015 to 2018.

In addition to the threat of Title III lawsuits, the Torricelli Act’s extension of the sanctions to foreign subsidiaries of US companies affects Cuba’s tourism sector when there are mergers and acquisitions. As of March 2023, the Be Live hotels of the Spanish chain Grupo Globalia have become the property of the American hotel company Hyatt, including the five Be Live hotels in Cuba, putting that company in violation of US regulations. As a consequence Be Live Hotels pulled out of Cuba.Footnote 40

Impact of Economic Sanctions on Cuba’s Biotechnological Sector

US sanctions target each of the areas in which Cuba is positioned to produce goods and services on a par with highly developed countries. Most significantly, the Torricelli Act specifically targets the biotechnological sector, prohibiting the export of medical equipment and goods that can be used in the production of any biotechnological product. In addition, there is a broader rule, issued by the U.S. Department of Commerce’s Bureau of Industry and Security in October 2019, that prohibits the export of goods to Cuba – by companies in third countries – if they have even 10 percent de minimis US-origin contents.Footnote 41 This also undermines Cuba’s biotech sector.

From its inception, Cuba’s development of biotechnology, mainly to develop and produce pharmaceuticals, has proved innovative and technically sophisticated. Cuba’s biotech industry has several innovative vaccines, including the recombinant hepatitis B vaccine, which received pre-qualification from the WHO in 2001, and the world’s first effective vaccine against meningitis B.Footnote 42 The Cuban government established the National Center for Scientific Research in 1965, and has made substantial investment in this area since the 1980s, with the founding in 1986 of the Center for Genetic Engineering and Biotechnology. It is estimated that, in the period 1990–1996, the state invested on the order of $1 billion for biotechnology to emerge as an important branch of the Cuban economy.Footnote 43 Today, the main biotech institutions belong to what is known as the Scientific Pole, which includes ten major centers and more than fifty related research and production institutions, employing more than 1,500 researchers. Cuban biotechnology production provides about 70 percent of Cuba’s domestic need for pharmaceuticals.Footnote 44

However, Cuban state companies are systematically blocked from acquiring technologies, raw materials, reagents, diagnostic tools, medicines, devices, equipment, and the necessary spare parts – not only from US companies, but also from companies in third countries. Some companies simply refuse to enter into commercial transactions with Cuba, out of concern that they may run afoul of sanctions; others refuse to update the documentation needed to continue the trade relations; others decline to sell lifesaving drugs in areas such as oncology and pediatrics, or reagents for Cuba’s Covid-19 vaccine candidates.

For example, the purchase of Vitek 2 Compact 15 laboratory equipment for one of the enterprises that manufactures the Cuban vaccine candidates was cancelled when Canadian supplier North World Industry Inc. (NWI) informed its Cuban customer that the company’s supplier, Biomeriux Canadá, had refused to supply the equipment and its consumables, because the components were manufactured in the US. NWI sought to procure the equipment from Spain, through Biomereux’s European subsidiary, and from Panama, through a Latin American subsidiary, to no avail.Footnote 45 This forced Cuba’s biotechnology companies to seek alternative suppliers, which in turn added costs to the production.

Once MediCuba finds a supplier, there is also then the difficulty of finding an air carrier to bring the items to Cuba. In 2019, for example, the airline Emirates rejected a shipment of the drug Carbidopa-levodopa, contracted by MediCuba from the Indian manufacturer and supplier Apex Drug House, claiming that they could not transport goods destined for Cuba.Footnote 46

There are then parallel problems in finding banks to handle the financial transactions, even for medical goods. Even for transactions that are legal, banks are leery of working with Cuba, given the severity of the penalties that have been imposed. For example, in 2019, the Treasury Department’s OFAC imposed penalties on the financial banking sector companies UniCredit Bank AG (Germany), UniCredit Bank Austria (Austria), and UniCredit Bank SpA (Italy), totaling $1.3 billion, for bank transfers allegedly made in violation of the Cuban Assets Control Regulations.

Thus, US sanctions undermine Cuba’s biotech industry at every juncture. The sanctions interfere in importing components of the drugs the biotech industry is developing and manufacturing, The sanctions make research difficult, since Cuba’s biotech institutes depend on the cross-border exchange of ideas. Once the products are developed, the sanctions hinder their commercialization. US sanctions have even blocked the use of critical software and cyber platforms such as Zoom,Footnote 47 that would be employed, among other things, to facilitate training for doctors and telemedicine services not only in Cuba but around the world.

Cuban scientists responded to their relative isolation by becoming increasingly resourceful, imaginative, and thoughtful about their mission, and by working cooperatively rather than competitively. There are several important scientific breakthroughs that have resulted. Cuba has produced five Covid-19 vaccine candidates, and a Covid-19 treatment protocol, 90 percent of which is based on drugs made in Cuba. But even where there are successes, the sanctions have created additional costs and difficulties at every level; and due to the sanctions, Cuba has lost opportunities to market these results.

Conclusion

Cuba’s economic difficulties are a result of a combination of factors; among these are the legacy of colonialism and neocolonialism and economic policies adopted by the Cuban government. However, it cannot plausibly be denied that Cuba’s post-1959 development strategy has been severely impacted by the system of unilateral economic sanctions imposed by the US which target each of the main pillars of the Cuban economy: exports, such as nickel and cobalt; revenue from tourism; and major investments in infrastructure, such as the Port of Mariel. The sanctions also target Cuba’s most dynamic sectors and limit the competitive advantages that Cuba has. This is particularly visible in the case of Cuba’s biotechnology initiative.

It is often claimed that the “embargo” of Cuba is a bilateral issue, in which the US restricts only the actions of its own nationals. On the contrary, the sanctions regime has a strong extraterritorial character, deeply impacting Cuba’s trade with third countries. In addition, the sanctions do not include provisions for any periodic assessment of its impact on Cuba’s most vulnerable populations. By almost any standard, the UCMs on Cuba run counter to human rights concerns, since they indiscriminately affect the whole population of the island; even more so at a time of a global pandemic.

At the same time, this sanctions regime holds a distinction for both longevity and breadth. The intricate, everchanging web of statutes, rules, regulations and blacklists constitute a formidable obstacle for the normal diversification of Cuba’s foreign trade, and generates a significant chilling effect affecting potential foreign investors. This in turn limits the access of Cuban development projects to the capital necessary to grow and to support social development as well, including employment and healthcare.

Taken as a whole, the US sanctions on Cuba have done considerable damage not only to Cuba’s overall economic health but have also inflicted considerable damage on the Cuban population, and have interfered in many ways with the realization of Cuba’s development goals.

Footnotes

1 Margaret P. Doxey, Economic Sanctions and International Enforcement, 2nd ed. (New York: Oxford University Press, 1980), 14–15.

2 Dwight D. Eisenhower, “Statement by the President Upon Signing Bill and Proclamation Relating to the Cuban Sugar Quota,” comp. Gerhard Peters and John T. Woolley, The American Presidency Project, accessed December 18, 2024, www.presidency.ucsb.edu/node/235042.

3 Álvarez González, Elena y Fernández Mayo, and María Antonia, “Dependencia Externa de la Economía Cubana” Documento INIE (Havana: Instituto Nacional de Investigaciones Económicas (National Institute of Economic Research, INIE), 1992) unpaginated.

4 Cuban Economy: The Special Period, 1990–2000 (Havana: Banco Central de Cuba, 2001).

5 Law Decree 77 of 1995, also known as the Foreign Investment Act. This Act authorized foreign investment in all sectors of the Cuban economy other than health, education, and the armed services. Under this new law, foreign investors could establish joint venture vehicles by partnering with local Cubans to conduct business in Cuba.

6 Some of the statutes and executive orders include the: Export Control Act of 1949; President Kennedy Executive Proclamation 3447, based on the Foreign Assistance Act of 1961, section 620a; provisions of the Trading with the Enemy Act of 1917, section 5b; Cuban Assets Controls Regulations in 1963 (Department of the Treasury). This legal framework has primarily been enforced by the Treasury Department’s OFAC.

7 Cuban Democracy Act of 1992, Pub. L. No. 102–484, 106 Stat. 2575 (1992) (codified at 22 U.S.C.S. §§ 6001–10 (1993)).

8 H 9084, 102nd Cong., 2nd Sess. Cong. Rec, (September 22, 1992), vol. 138, no. 130, pt. 2 (U.S. Congress, House of Representatives, Mr. Alexander, Mr. Bereuter, Mr. Broomfield, Mr. Burton of Indiana, Mr. Fascell, Mr. Gilma, Mr. Goss, Mrs. Johnson of Connecticut, Mr. Lagomarsino, Mr. Ramstad, Mr. Rangel, Mr. Ros-Lehtinen, Mr. Serrano, Mr. Smith of Florida, and Mr. Torricelli speaking on the Cuban Democracy Act of 1992), quoted in Joanna R. Cameron, “The Cuban Democracy Act of 1992: The International Implications,” Fletcher Forum of World Affairs 20, no. 1 (Winter/Spring 1996), 137.

9 Cuban Democracy Act, Sec. 6002, Statement of Policy.

10 Jane Franklin, “The Politics behind Clinton’s Cuba Policy,” Baltimore Sun, August 30, 1994.

11 Richard Garfield and Sarah Santana, “The Impact of the Economic Crisis and the US Embargo on Health in Cuba,” American Journal of Public Health 87, no. 1 (January 1997): 15–20.

12 Ministry of Foreign Affairs (MINREX), Republic of Cuba, “Cuba’s Report on Resolution 75/289 of the United Nations General Assembly Entitled ‘Necessity of Ending the Economic, Commercial and Financial Blockade Imposed by the United States of America against Cuba,’” January–July 2021, accessed November 4, 2024, bit.ly/4eB3e8g.

13 Richard E. Feinberg, “Reaching Out: Cuba’s New Economy and the International Response,” Latin American Initiative, Brookings, November 17, 2011, 68, accessed November 4, 2024, bit.ly/4koIeCT.

14 There is no US development assistance to Cuba as provided by the Foreign Assistance Act (1961). Also, all USAID funds for Cuba are provided for nonstate organizations without the consent of the Cuban government and are aimed at promoting human rights only as civil and political rights. Available at: www.usaid.gov/cuba, accessed November 4, 2024.

15 Pedro A. Freyre, Martin Domb, and Augusto E. Maxwell, “Cuba: Helms–Burton Act, Trends and Development,” Akerman, January 11, 2022, accessed November 4, 2024, bit.ly/44c3rLx.

16 “Helms–Burton Law Crushed Investment in Cuba,” Havana Consulting Group, May 21, 2020, accessed November 4, 2024, www.thehavanaconsultinggroup.com/enUS/Articles/Article/82.

17 The Trade Sanctions Reform and Export Enhancement Act of 2000, Pub. L. No. 106–387, Title IX (October 28, 2000).

18 U.S. Department of the Treasury, “OFAC Issues Clarification on Payments for Agricultural and Medical Shipments to Cuba,” Press Release, February 22, 2005, accessed November 4, 2024, https://home.treasury.gov/news/press-releases/js2268.

19 Joy Gordon, “Economic Sanctions As Negative Development: The Case of Cuba,” Journal of International Development 28, no. 4 (2016): 473–484.

20 Bart M. McMillan, Alexandre Lamy, and Andrea Tovar, “U.S. State Department Announces Designation of Cuba As a State Sponsor of Terrorism,” Sanctions & Export Controls Update, Baker McKensie, January 12, 2021, accessed November 4, 2024, bit.ly/44tqVdE.

21 MINREX Cuba, “Update to the Report of Cuba on Resolution 75/289 of the United Nations General Assembly Entitled ‘Necessity of Ending the Economic, Commercial and Financial Embargo Imposed by the United States of America against Cuba,’” August 2021–February 2022, 9, accessed November 4, 2024, bit.ly/3IqPYXq.

22 MINREX Cuba, “Update on 75/289.”

23 MINREX Cuba, “Update on 75/289,” 9–10.

24 UNCTAD, “UNCTAD’s Contribution to the Report of the UN Secretary-General: Necessity of Ending the Economic, Commercial and Financial Embargo Imposed by the United States of America against Cuba,” A/74/91, 4, August 19, 2019, accessed November 4, 2024, https://tinyurl.com/2uxtdfv4.

25 The law states:

Beginning on the 61st day after the date of the enactment of this Act, a vessel which enters a port or place in Cuba to engage in the trade of goods or services may not, within 180 days after departure from such port or place in Cuba, load or unload any freight at any place in the United States, except pursuant to a license issued by the Secretary of the Treasury. (U.S. Department of State Archive, “Title XVII – Cuban Democracy Act of 1992,” Sec.1706(a)1, accessed November 4, 2024, https://1997-2001.state.gov/www/regions/wha/cuba/democ_act_1992.htm)

26 U.S.–Cuba Trade and Economic Council, “Crowley Maritime Corporation Is 32nd Libertad Act Lawsuit – Plaintiffs Target Use Of ZEDM Port,” Economic Eye on Cuba, December 23, 2020, accessed December 18, 2024, www.cubatrade.org/blog/2020/12/23/5ms3f5lr8xytqozz63dfr176qxose9; U.S.–Cuba Trade and Economic Council, “Seaboard Marine Is 31st Libertad Act Lawsuit – Plaintiff Targets Mariel Special Economic Zone Operations,” Economic Eye on Cuba, December 23, 2020, accessed December 18, 2024, www.cubatrade.org/blog/2020/12/23/agdh6liz2sexx0emhpw0nrqaphmbnr.

27 Decree Law No. 290 of Cuba’s Council of Ministers establishes the general rules for the registration and control of economic damages and losses caused by the economic, commercial, and financial blockade imposed by the US on the Republic of Cuba. Article 9, refers to Losses due to geographic relocation of the business. It includes, in addition to the price of the product, the cost of insurance and freight. Ministerio de Justicia, Gaceta Oficial de la República de Cuba, Gaceta Oficial No. 022 Extraordinaria de 2 de abril de 2012 (Havana: Republic of Cuba), 89.

28 UNSG, “Necessity of Ending the Economic, Commercial and Financial Embargo Imposed by the United States of America against Cuba,” Report, A/75/81 (September 21, 2020), 43.

29 Mining Technology (website), “Cobalt Production in Cuba and Major Projects,” updated June 23, 2023, accessed December 18, 2024, www.mining-technology.com/data-insights/cobalt-in-cuba/.

30 Other regions across Cuba where there may be commercially viable nickel-cobalt deposits include Mayarí, San Felipe, and Cajálbana. See Michael H. Erisman, “Cuban Cobalt: A Gateway to a Strategic Mineral Politics?” International Journal of Cuban Studies 14, no. 2 (Winter 2022): 343–358.

31 In 2024, the main destinations of Cuban nickel were China, Spain and Germany. See The Observatory of Economic Complexity, accessed June 21, 2025, https://oec.world/en/profile/country/cub.

32 Pratima Desai and Makiko Yamazaki, “Exclusive: Tesla’s Battery Maker Suspends Cobalt Supplier Amid Sanctions Concern,” Reuters, July19, 2018, accessed November, 23, 2024, www.reuters.com/article/us-tesla-cuba-cobalt-exclusive-idUSKBN1K92Q9.

33 Desai and Yamazaki, “Exclusive.”

34 Ana M. Lopez, “Cruise Industry in the Caribbean – Statistics & Facts,” Statista, December 15, 2022, accessed September 4, 2024, www.statista.com/topics/6610/cruise-industry-in-the-caribbean/.

35 Travel to Cuba for tourist activities remains prohibited by statute. However, OFAC has issued general licenses for twelve categories of travel. Individuals are not required to obtain licenses from OFAC if their travel is covered by a general license. Travel to Cuba, accessed September 4, 2024, https://help.cbp.gov/s/article/Article-243?language=en_US#:~:text=Travel%20to%20Cuba%20for%20tourist,covered%20by%20a%20general%20license.

36 Héctor Ayala Castro, “Comportamiento de ingresos por turismo internacional en Cuba 2014–2018,” Economía y Desarrollo 163, no.1 (June 2020): Epub June 1, 2020, online version ISSN 0252-8584.

37 Oficina nacional de Estadísticas, Republica de Cuba, Turismo, llegada de visitantes Internacionales, accessed September 14, 2024, www.onei.gob.cu/sites/default/files/servicios_informativos_no.12_turismo_diciembre_2019_0.pdf.

38 UN Secretary-General, “Necessity,” 29.

39 Laurie Baratti, “Four US Cruise Lines Fined $440 Million For ‘Trafficking’ in Cuba,” Travel Pulse, January 2, 2023, accessed September 21, 2024, http://bit.ly/44zcHIv.

40 The website shows that Cuba is no longer a destination: accessed November 21, 2024, www.belivehotels.com/en/.

41 Bureau of Industry and Security, Commerce, “Restricting Additional Exports and Reexports to Cuba,” Federal Register, October 21, 2019, accessed December 18, 2024, https://tinyurl.com/2sp25p5y.

42 Debra Evenson, “Cuba’s Biotechnology Revolution,” MEDICC Review 9, no. 19 (Fall 2007), 8.

43 Ernesto López Mola et al., “Development of Cuban Biotechnology,” Journal of Commercial Biotechnology 9, no. 2 (2002): 147.

44 Helen Yaffe, “The Curious Case of Cuba’s Biotech Revolution,” in History of Technology. Vol. 34, ed. I. Inkster (London: Bloomsbury Publishing, 2019), 15, accessed September 21, 2024, https://eprints.gla.ac.uk/181175/7/181175.pdf.

45 “Cálculo de daños y perjuicios a Cuba por el bloqueo económico, comercial, financiero y tecnológico de los Estados Unidos de América,” in Resultado de Investigación, unpublished internal INIE document (Havana: INIE, March 2021).

46 UN Secretary-General, “Necessity,” 27–31.

47 Oppenheimer, Harry, Ana Ablove, and Ronya Ensafi. “How Geo-blocking Limits Digital Access in Sanctioned States.” Lawfare: Cybersecurity & Tech Foreign Relations & International Law States & Localities Surveillance & Privacy, November 18, 2018, accessed June 21, 2025, https://tinyurl.com/yw8afds7.

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