En esta edición | Junio 2026

Cuba está anunciando simultáneamente su paquete de reformas económicas más ambicioso de los últimos años mientras se enfrenta a sanciones estadounidenses y presiones legales adicionales. Se seleccionaron tres eventos para ilustrar la brecha cada vez mayor entre las intenciones anunciadas por La Habana y el continuo cerco legal y financiero de Washington. La contradicción central es cada vez más clara: Cuba intenta una liberalización económica altamente controlada y precisa dentro de un marco socialista, mientras que Estados Unidos comprime cada vez más el espacio de maniobra de las entidades vinculadas al Estado cubano.

Cualquier interpretación de la situación en Cuba que no coloque esta dicotomía en el centro de su análisis está pasando por alto el principal indicador del enfoque preferido de Estados Unidos en sus objetivos de política exterior en la isla.

Se aplica la clasificación propietaria del ST Monitor para interpretar eventos específicos según su fase de ejecución. Algunos planes se mantienen en el nivel de (1) intenciones políticas sin marco ejecutivo; otros están (2) limitados dentro de sistemas de permisos; y otros se encuentran en (3) fase plenamente operativa e institucionalizada. Los casos elegidos para esta edición deben leerse a través de esa lente:

Nivel 1 — Pre-política (no existe marco ejecutable)

Nivel 2 — Ejecución restringida (existe actividad, pero está sujeta a permisos)

Nivel 3 — Fase de Ejecución (el sistema está operativo e institucionalizado)

ExxonMobil v. CIMEX: La Corte Suprema Elimina la Inmunidad Soberana de Cuba bajo la Ley Helms-Burton

El 23 de junio de 2026, la Corte Suprema falló por 6-3 que las empresas estadounidenses pueden demandar a empresas estatales cubanas (SOE) en tribunales de Estados Unidos por propiedades confiscadas después de 1959, sin necesidad de cumplir con los estándares de excepción de la Ley de Inmunidades Soberanas Extranjeras (FSIA). El juez Kavanaugh redactó la opinión de la mayoría. La jueza Kagan discrepó, acompañada por Sotomayor y Jackson. Se revocó y devolvió el fallo al Circuito de Cortes de Washington, D.C.

Este fallo de la Corte Suprema incorpora la litigación al arsenal de Washington para presionar al gobierno cubano a sentarse a la mesa de negociaciones.

Los Hechos del Caso

El gobierno cubano confiscó la refinería de Standard Oil, sus terminales y más de cien estaciones de servicio luego de 1960. Dos empresas estatales cubanas—Unión Cuba-Petróleo (CUPET) y Corporación CIMEX, S.A.—han operado y obtenido beneficios de esos activos desde entonces. En 1969, la Comisión de Liquidación de Reclamaciones Extranjeras certificó la reclamación de Exxon en más de 71,6 millones de dólares. Contabilizando los intereses previos al juicio y los daños triples establecidos en el Título III de la Ley Helms-Burton, esa cifra supera ahora los 1,000 millones de dólares. El 2 de mayo de 2019, Exxon demandó a ambas entidades, y al alter ego panameño de CIMEX (o empresa pantalla), el mismo día en que el Departamento de Estado levantó la suspensión presidencial sobre el Título III que todas las administraciones anteriores habían mantenido de forma continua desde 1996. El Tribunal de Distrito desestimó el caso arguyendo conflictos con la ley FSIA. Un panel dividido del Circuito (de apelaciones) de D.C. confirmó esa desestimación, que la Corte Suprema ahora ha revocado en favor de Exxon.

El Fallo del 23 de Junio

Un demandante que demande a una “agencia o instrumentalidad cubana” bajo el Título III de la Ley Helms-Burton no necesita cumplir ninguna de las excepciones de inmunidad enumeradas en la FSIA. La propia Ley Helms-Burton produce la derogación (o eliminación) de la inmunidad.

El razonamiento se basa en CUATRO puntos: (1) La acción bajo el Título III se dirige expresamente contra “cualquier agencia o instrumentalidad de un Estado extranjero”, que la Corte interpreta como una derogación de inmunidad según su propio precedente en Kirtz. (2) Exigir el cumplimiento de la FSIA vaciaría la acción de contenido, porque el embargo que la ley Helms-Burton codificó simultáneamente hace que las únicas excepciones disponibles bajo la FSIA sean casi imposibles de cumplir. (3) El Congreso colocó estas demandas bajo 28 U.S.C. §1331, la regulación general sobre cuestión federal, no bajo la §1330, que rige las demandas de la FSIA. Y (4) la concesión al Presidente del poder plenario para suspender demandas de Título III refleja el régimen de inmunidad previo a la FSIA, en el que la inmunidad era una determinación ejecutiva, no judicial.

Dicho de otro modo, los ciudadanos estadounidenses que demanden a empresas estatales cubanas por propiedades confiscadas, bajo el amparo de la ley Helms-Burton, no tienen que superar los obstáculos de la FSIA. Según Kirtz, la Ley Helms-Burton cancela por sí sola la inmunidad de Cuba, porque la ley nombra explícitamente a entidades estatales extranjeras como demandadas y canaliza los casos a través de la jurisdicción general de cuestiones federales en lugar del marco de la FSIA.

Además, obligar a los demandantes a seguir las reglas de la FSIA haría que la ley fuera inútil debido a lo estricto del embargo estadounidense, y la estructura de la Ley en sí deja intencionadamente las decisiones de inmunidad al Presidente en lugar de a los tribunales.

Sin embargo, la decisión no resuelve todos los asuntos pendientes. La Corte reservó expresamente el tema de si la Helms-Burton deroga la inmunidad de instrumentalidades extranjeras no cubanas, por lo que no se abordan los socios extranjeros que ahora enfrentan presión de designación.

En la práctica, el fallo autoriza el derecho a demandar a empresas estatales cubanas y a obtener un fallo, pero no resuelve el derecho a cobrar. Es decir, la inmunidad de ejecución bajo 28 U.S.C. §§1609–1611 permanece intacta, lo que significa que un demandante que gane contra CUPET no puede simplemente enviar tropas federales estadounidenses a incautar un buque de carga del gobierno cubano o una refinería. Esos activos siguen protegidos por el §1609.

No obstante, en este último punto, la mayoría aclaró que un fallo tiene valor independiente como “ventaja” frente a “desarrollos futuros en la ley o en Cuba”. También es notable que la Corte mencionara en una nota al pie que tales fallos pueden proporcionar “incentivos correspondientes para que Cuba se democratice”, asumiendo así una posición específica sobre los objetivos actuales de política exterior de Estados Unidos en Cuba.

Las Consecuencias del Fallo

Con esta decisión, la Corte Suprema de Estados Unidos advierte que tiene apetito para interpretar extensivamente la Ley Helms-Burton. El fallo no cambia a corto plazo la realidad jurídica de las empresas estatales cubanas frente a demandantes estadounidenses. Sin embargo, el resultado indica que la propia Corte es el actor más reciente en incorporarse a un aparato económico, político y legal altamente cohesionado, bajo un Departamento de Estado liderado por Marco Rubio, diseñado para presionar al gobierno cubano a reformarse o sucumbir.

Además, la decisión de la Corte convirtió el Título III en un instrumento mucho más afilado. Se verificó oficialmente que el Título III de la Ley Helms-Burton está diseñado para actuar como una ventaja geopolítica de la Casa Blanca contra La Habana. Por un lado, las corporaciones estadounidenses (como Exxon) ahora están autorizadas a perseguir a empresas estatales cubanas en tribunales de EE.UU. y previsiblemente ganar casos con compensaciones enormes, lo que a su vez infligirá inmensas presiones económicas y de divulgación sobre el gobierno cubano. Por otro lado, como el fallo confirmó que el Presidente de Estados Unidos retiene el derecho legal de congelar estas demandas en cualquier momento, es la Casa Blanca quien tiene el control último sobre el asalto legal, otorgando a la administración aún más ventaja en las negociaciones con La Habana.

Estado: Nivel 3 – Fase de Ejecución

Con las Sanciones del 23 de junio, Estados Unidos Vuelve a Aplicar el Manual Sherritt

El 23 de junio, el Departamento de Estado y el Departamento del Tesoro de Estados Unidos sancionaron a cinco entidades estatales cubanas (SOE) adicionales. A simple vista, las designaciones de GeoMinera S.A., RAFIN S.A., Banco Financiero Internacional (BFI), AUSA y Empresa Siderúrgica José Martí parecen encajar en el plan habitual de poner en cuarentena los activos del gobierno cubano para intentar cortar los flujos de divisas.

No obstante, este nuevo evento revela un patrón emergente junto a la adquisición de la operación de níquel-cobalto de Sherritt en Cuba, por parte del fondo estadounidense Gillon Capital. Pareciera que Washington está haciendo algo más que congelar activos para beneficio de sus propios objetivos políticos solamente. La administración estadounidense podría estar alineando cada vez más sus objetivos políticos con intentos de adquirir los activos que sanciona, definiendo así un nuevo manual en el diferendo Cuba-EE.UU.

Este nuevo enfoque apunta a una estrategia altamente pragmática (y efectiva) hacia Cuba, donde el objetivo de política exterior estadounidense es doble: político y económico, y no se excluyen mutuamente. Previas Administraciones estadounidenses—incluido el primer mandato de Trump—nunca habían mostrado este nivel de sofisticación, coordinación y disposición para usar todo su arsenal de herramientas diplomáticas, económicas y legales a la hora de perseguir sus objetivos políticos en Cuba.

La Nueva Técnica

Desde mayo, Washington ha estado sancionando los vehículos legales de empresas mixtas cubanas (JV o joint venture) a través de los cuales las empresas estatales en Cuba se asocian con compañías extranjeras, y no solo a las matrices estatales cubanas que hay detrás.

El 7 de mayo, Moa Nickel S.A. (MNSA)—la operación mixta de níquel-cobalto entre Sherritt y Cuba—fue designada por el Departamento de Estado, con un lenguaje vinculado explícitamente a expropiaciones posteriores a 1959: Moa Nickel “obtiene beneficios” de activos “confiscados” a personas y corporaciones estadounidenses. La rápida consecución de eventos que siguió, llevó a Sherritt a entregar un instrumento privado de opción compra de acciones a Gillon Capital (EE.UU.), por el 55% de su participación en la JV de níquel-cobalto, a precio de remate. Anteriormente documenté este asunto y sus consecuencias.

Ahora, un mes después, otras dos empresas con situaciones relativamente similares están un ciclo por detrás del destino de Moa Nickel y cayendo rápidamente en la misma posición que enfrentó Sherritt:

a. Antilles Gold

El 4 de junio, OFAC designó a Minera La Victoria S.A. (MLV), la empresa mixta entre la minera australiana Antilles Gold y la empresa estatal cubana GeoMinera. La empresa mixta opera una mina de oro-plata-antimonio y una mina de cobre-oro en dos ubicaciones diferentes en Cuba, y posee varias concesiones independientes de cobre. El 5 de junio, Antilles Gold solicitó de emergencia una suspensión temporal de sus acciones en la Bolsa de Valores de Australia (ASX), pendiente de un anuncio sobre sus motivos. El 10 de junio, Antilles Gold explicó los motivos de la suspensión requerida, argumentando “incertidumbre” sobre el “impacto actual y futuro en sus activos y actividades en Cuba” tras la sanción y designación de su JV por OFAC.

El 18 de junio, la compañía confirmó que había suspendido su gestión directa y la financiación de MLV en Cuba, al tiempo que anunció que había entrado en “discusiones” con el Departamento de Estado de EE.UU. para “presentar una propuesta” sobre el asunto “en un futuro próximo”. Ese mismo día, la ASX anunció además que la negociación en bolsa de las acciones de Antilles Gold se reanudaría.

Antilles Gold claramente aprendió de los eventos de Mayo y actuó mucho más rápido que Sherritt, congelando voluntariamente el precio de sus acciones inmediatamente después de las sanciones y entrando posteriormente en negociaciones con el Departamento de Estado. Claramente se tomaron esas decisiones para salvar la empresa de una valoración desplomada, de cara a las negociaciones venideras. Esa parte del problema parece haberse resuelto, dado el posterior anuncio de “negociaciones” y el levantamiento de la suspensión de sus acciones en bolsa.

No obstante, la JV de Antilles Gold no se salvará del mismo problema que hundió la operación de níquel-cobalto de Sherritt: una vez sancionada por OFAC, las cuentas por cobrar permanecen congeladas en el balance de la empresa y la pregunta de si se pueden cobrar se convierte en un problema legal que solo el gobierno estadounidense puede desbloquear. Así, la puerta vuelve a quedar abierta, de par en par, para que un actor estadounidense intervenga y obtenga la autorización del gobierno de EE.UU. para adquirir esos activos.

b. Trafigura

La designación de GeoMinera del 23 de junio afecta directamente la exposición de Trafigura en Cuba. Posiblemente previendo la situación, Trafigura ya había comenzado a detener envíos de concentrado de zinc desde la mina Castellanos (Minas de Matahambre) en el occidente de Cuba a compradores externos desde las sanciones a la MLV del 4 de junio. La designación de Geominera ahora obliga al negocio de zinc de Trafigura en Cuba a enfrentar las mismas decisiones que debe tomar Antilles Gold.

La designación a nivel de JV elimina el aislamiento legal del socio extranjero. El propio lenguaje del Departamento de Estado vincula la vía de las sanciones al Título III, que el fallo de Exxon—decidido el mismo día que la designación de la JV de Trafigura—ha hecho más ejecutable contra todas las empresas estatales cubanas y sus socios.

Conclusión: Una Carrera a Toda Velocidad por los Minerales Críticos de Cuba

De cara al futuro, no sería irracional esperar que EE.UU. repita esta arquitectura emergente de forma continua: designar la JV cubana, tratar de hacer entrar en crisis al socio extranjero, y posicionar a un comprador alineado con EE.UU. bajo la no-objeción del Departamento de Estado y del Tesoro. Este es, ahora, un modelo que el gobierno estadounidense parece estar aplicando firme y coordinadamente.

En dos meses, el gobierno estadounidense ha paralizado y puesto una presión severa sobre todos los operadores extranjeros de los activos de níquel, cobalto, oro, plata, cobre, antimonio y zinc de Cuba. Con objetivos de política exterior maximalistas al frente de la ecuación, Washington se está moviendo con rapidez para asegurar toda la gama de minerales críticos de Cuba, mediante una combinación de sanciones cronometradas y oportunismo de mercado que está produciendo salidas de los socios extranjeros del gobierno cubano impulsadas por complimiento normativo. Por lo tanto, los comentarios enfocados en los modelos de Irán o Venezuela como análogos a la situación de Cuba están buscando pistas en el lugar equivocado.

Estado: Nivel 3 – Fase de Ejecución

Abriendo y Cerrando al Mismo Tiempo: Un Mapa de Cumplimiento Normativo y el Destino de las 176 medidas de Cuba

El paquete de reformas de Cuba del 18 de junio y las sanciones estadounidenses del 23 de junio no están desconectados entre sí. Las narrativas que afirmen lo contrario son incorrectas. Ambos conjuntos de acciones fueron anunciados aproximadamente la misma semana, sobre los mismos activos, desde direcciones opuestas. La Habana ofrece a los inversionistas extranjeros participación accionaria en empresas estatales que se convertirían a sociedades mercantiles por acciones, acceso a banca privada y controles estatales menos estrictos sobre la economía cubana. Washington sancionó al banco (BFI) a través del cual se liquidan prácticamente todas las transacciones de entidades extranjeras en Cuba, el nodo financiero offshore y vehículo de inversión (RAFIN S.A.) de Cuba, y el operador logístico (AUSA) del único puerto moderno de Cuba. Los inversionistas atrapados entre esos dos anuncios enfrentan un laberinto de cumplimiento normativo que ni las reformas ni las sanciones por sí solas explican completamente.

Sanciones Estadounidenses: El Viejo Perímetro Renovado

Para los ciudadanos estadounidenses, las Regulaciones de Control de Activos Cubanos (el Embargo o CACR) siguen siendo el marco rector. Asimismo, la Ley Helms-Burton ha salido reforzada tras la decisión en Exxon. Además, las entidades designadas bajo la E.O. 14404 y órdenes anteriores quedan vedadas a falta de licencias específicas, y la Licencia General 1 solo preserva lo que el Embargo ya permitía. La supuesta “apertura capitalista” contenida en las 176 medidas propuestas por La Habana no podrá cambiar nada de esto, dada la posición de Washington en contra de una apertura económica sin reforma política en Cuba.

Las nuevas sanciones recaen principalmente sobre personas no estadounidenses. La edición de Preguntas Frecuentes (FAQ) 1258 de OFAC, emitida el 4 de junio, establece que el riesgo de sanciones secundarias bajo la E.O. 14404 se extiende a cualquier entidad cubana con propiedad estatal del 50% o más—directa o indirectamente—, incluso cuando la entidad misma no figure en ninguna lista. Dado que las empresas estatales cubanas tienden a monopolizar todas las actividades y activos dentro de sectores enteros, esa regla del 50% casi con certeza significa que una futura “sociedad mercantil por acciones” en Cuba puede heredar las sanciones de la compañía matriz sin heredar su nombre.

Dicho de otro modo, como la economía cubana está completamente dominada por unos pocos monopolios estatales gigantescos, los inversionistas no pueden escapar de la nueva clase de sanciones. Si una empresa estatal matriz controla toda una industria como la minería o la logística, cada subsidiaria, empresa mixta o escisión que toque hereda esa regla de propiedad del 50% y queda automáticamente en la lista negra.

Desde el punto de vista del cumplimiento normativo, la revisión de listas solamente ya no será suficiente para completar los análisis de diligencia requerida. Ahora, los técnicos de cumplimiento normativo tendrán que preguntarse si el activo de la contraparte aparece en una lista y quién es el que, investigando hacia arriba, es el dueño.

Inversión: Un Problema de Diligencia en Dos Capas

Las 176 medidas de reforma invitan al capital extranjero, pero la Ley Helms-Burton revoca esa invitación. La responsabilidad bajo el Título III se aplica al “tráfico” en propiedades tomadas el 1 de enero de 1959 o después—completamente independiente de cualquier lista de sanciones—y la decisión en Exxon ha aclarado que las demandas contra empresas estatales cubanas ya no requieren que el demandante cumpla los requisitos de la FSIA. Por lo tanto, la investigación de diligencia requerida sobre cualquier nueva sociedad mercantil por acciones derivada de las reformas se realizaría en dos vías paralelas.

Primero, la vía de las sanciones: ¿alguna empresa matriz o subsidiaria califica como entidad bajo la regla del 50%, revisada contra la orientación de OFAC y la Lista Restringida de Cuba?

Segundo, la vía de origen bajo el Título III: ¿la tierra, planta o concesión subyacente se remonta a propiedad “confiscada” a un ciudadano estadounidense el 1 de enero de 1959 o después, revisada contra el registro de la Comisión de Liquidación de Reclamaciones Extranjeras y la cadena de titularidad histórica?

Estas son metodologías diferentes, que requieren habilidades diferentes para discernir las respuestas, y cada una es fatal de forma independiente para una inversión extranjera en Cuba. Ambos ejercicios deberán completarse antes de cualquier compromiso de inversión.

Consideraciones Finales: Lavado de Dinero (AML) e Infraestructura de Pagos

BFI servía como el banco de Cuba para transacciones de entidades extranjeras a nivel nacional, y RAFIN gestionaba los flujos financieros offshore. Ambos están ahora designados por OFAC. La consecuencia más inmediata será que los bancos (extranjeros) asociados mitigaran el riesgo de los flujos financieros vinculados a Cuba, empujando esas transacciones hacia canales menos transparentes, que es donde suelen concentrarse las complicaciones de tipo AML.

Para las instituciones financieras no estadounidenses, el marco legal de la regulación europea anti-Helms-Burton de 1996 no fue diseñado para el régimen de sanciones secundarias de 2026 con el alcance de la E.O. 14404. La vieja estrategia de evitar los dólares estadounidenses para comerciar con Cuba de forma segura en Euros o monedas locales ya no funciona. Bajo las nuevas reglas, Estados Unidos expulsará completamente a un banco extranjero del sistema del dólar si lo descubren manejando cualquier negocio cubano en cantidades significativas, independientemente de la moneda utilizada en la transacción. Es decir, para proteger su acceso al sistema financiero estadounidense, los bancos extranjeros ahora están obligados a buscar activamente a los propietarios ocultos de empresas estatales cubanas, revisar a todos los socios transando en moneda local y auditar su historial de transacciones pasadas en busca de violaciones ocultas como requisito básico, no como una opción.

En general, incluso si las reformas de Cuba abren espacio para el capital extranjero, el perímetro legal se contrajo mucho más rápido de lo que las reformas podrán expandirse. Los efectos de la nueva ronda de sanciones y de la decisión en Exxon durarán más y pesarán más que cualquier oportunidad que propicien las reformas. Esto es así porque las nuevas sanciones crearán un riesgo de gobernanza corporativa que ninguna empresa tendrá el apetito de asumir, y un fallo negativo bajo el Título III, una vez obtenido, será una reclamación legal asentada contra una futura Cuba que pronto puede lucir muy diferente. Los inversionistas que solo lean los anuncios de reformas en La Habana se están perdiendo la mitad importante de la historia.

Estado: (176 Medidas) Nivel 1 – Pre-política

Estado: (Mecanismo de Ejecución de Sanciones Estadounidense) Nivel 3 – Fase de Ejecución

La versión original de este artículo se publicó en Inglés, el 29 de Junio de 2026. Esta traducción al español se ofrece como cortesía al público hispanohablante.

El artículo original “ST Monitor | June 2026 | Resources Under Maximum Pressure: Reforms Announcement vs. Sanctions Reality in Cuba” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

Si te gustó la edición de hoy, reenvíasela a quien debería estar leyéndola.

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Qué Leer Después:

In this Edition | June 2026

Cuba is simultaneously announcing the most ambitious economic reform package in years while facing intensified U.S. sanctions and additional legal pressures. Three developments were chosen to illustrate the widening gap between Havana’s announced intentions and Washington’s ongoing legal and financial encirclement. The core contradiction is evermore clear: Cuba is attempting a highly controlled and narrow economic liberalization within a socialist framework, while the U.S. is increasingly compressing the space for maneuver of Cuban state-linked entities.

Any interpretation of the situation in Cuba that does not put this dichotomy at the forefront of its analysis is missing the lead indicator of the U.S. preferred approach to its foreign policy goals there.

The ST Monitor proprietary classification is applied to interpret specific developments based on their phase of execution. Some plans remain at the level of (1) political signaling without an operational framework; others are (2) constrained within permission-based systems; and others are (3) fully operational and institutionalized. The cases chosen for this edition should be read through that lens:

Level 1 — Pre-policy (no executable framework exists)

Level 2 — Constrained execution (activity exists but is permission-bound)

Level 3 — Execution Phase (system is operational and institutionalized)

ExxonMobil v. CIMEX: Supreme Court Strips Cuba’s Sovereign Immunity under Helms-Burton Act

On June 23, 2026, the Supreme Court ruled 6–3 that U.S. companies can sue Cuban state-owned enterprises (SOE) in U.S. courts for property confiscated after 1959, without needing to satisfy the exception standards of the Foreign Sovereign Immunities Act’s (FSIA). Justice Kavanaugh wrote for the majority. Justice Kagan dissented, joined by Sotomayor and Jackson. The D.C. Circuit’s judgment was reversed and remanded.

The Supreme Court ruling further incorporates litigation into Washington’s unprecedented toolkit to pressure the Cuban government to the negotiating table.

The Facts of the Case

Cuba’s government confiscated Standard Oil’s refinery, terminals, and over a hundred service stations beginning in 1960. Two Cuban SOEs—Unión Cuba-Petróleo (CUPET) and Corporación CIMEX, S.A.—have operated and profited from those assets since. In 1969, the Foreign Claims Settlement Commission certified Exxon’s claim at over $71.6 million. Accounting for prejudgment interest and Title III’s statutory treble damages, that figure now exceeds $1 billion. On May 2, 2019, Exxon sued both entities, and CIMEX’s Panamanian alter ego (or front company)—the same day the State Department lifted the presidential suspension of Title III that every administration had exercised continuously since 1996. The District Court dismissed the case on FSIA grounds. A divided D.C. Circuit (appeals) panel affirmed that dismissal, which the Supreme Court has now reversed in favor of Exxon.

The June 23 Holding

A plaintiff suing a “Cuban agency or instrumentality” under Title III of the Helms-Burton Act does not need to satisfy any FSIA’s enumerated immunity exceptions. The Helms-Burton Act itself effects the abrogation (or elimination).

The reasoning rests on FOUR points: (1) Title III’s cause of action runs expressly against “any agency or instrumentality of a foreign state,” which the Court reads as an abrogation of immunity under its own precedent in Kirtz. (2) Requiring FSIA compliance would gut the cause of action, because the embargo that Helms-Burton simultaneously codified makes the only available FSIA exceptions nearly impossible to satisfy. (3) Congress placed these suits under 28 U.S.C. §1331, the general federal question statute, not §1330, which governs FSIA suits. And (4) the Act’s grant to the President of plenary power to suspend Title III suits mirrors the pre-FSIA immunity regime, in which immunity was an executive determination, not a judicial one.

In other words, U.S. persons suing Cuban SOEs over confiscated property under Helms-Burton do not have to clear FSIA hurdles. Under Kirtz, the Helms-Burton Act cancels out Cuba’s immunity on its own because the law explicitly names foreign state entities as defendants and routes the cases through general federal-question jurisdiction rather than the FSIA framework.

Furthermore, forcing plaintiffs to follow FSIA rules would render the law entirely useless due to the strict U.S. embargo, and the Act’s structure intentionally leaves immunity decisions up to the President rather than the courts.

However, the decision does not settle every matter at hand. The Court expressly reserved whether Helms-Burton abrogates the immunity of non-Cuban foreign instrumentalities, meaning the foreign-state-linked partners now facing designation pressure are not addressed.

In practice, the ruling greenlights the right to sue Cuban SOEs and obtain a judgment, but it does not resolve the right to collect. That is, execution immunity under 28 U.S.C. §§1609–1611 is untouched, meaning that a plaintiff who wins against CUPET cannot simply send U.S. federal marshals to seize a Cuban government cargo ship or a refinery. Those assets are still protected by §1609.

Nevertheless, on the latter point, the majority clarified that a judgment has independent value as “leverage”, and against “future developments in the law or in Cuba.” Also notably, the Court footnoted that such judgements may provide “corresponding incentives for Cuba to democratize,” thus taking a position on the current U.S. foreign policy goals in Cuba.

The Aftermath of the Ruling

The U.S. Supreme Court is warning with this decision that it has an appetite for reading the Helms-Burton Act expansively. The ruling does not change Cuba’s SOEs legal reality vis-à-vis U.S. plaintiffs in the short term. Nevertheless, the outcome indicates that the Court itself is the latest actor to enter a highly-cohesive economic, political, and legal apparatus under a Rubio-led State Department, designed to pressure the Cuban government to reform or succumb.

Moreover, the Court’s decision made Title III a much sharper instrument. It officially verified that Title III of the Helms-Burton Act is indeed designed to act as a geopolitical lever for the White House against Havana. On the one hand, U.S. corporations (like Exxon) are now greenlighted to chase after Cuban SOEs in U.S. courts and predictably win massive judgements, which in turn will inflict immense economic and disclosure pressures on the Cuban government. On the other hand, because the ruling confirmed that the U.S. President retains the statutory right to freeze these suits at any time, it is the White House who holds ultimate control over the legal onslaught, thus giving the administration even more leverage in the negotiations with Havana.

Status: Level 3 – Execution Phase

With the June 23 Sanctions, the U.S. Is Running the Sherritt Playbook Again

On June 23, the U.S. State Department and U.S. Treasury sanctioned an additional five Cuban state-owned entities (SOEs). At face value, the designations of GeoMinera S.A., RAFIN S.A., Banco Financiero Internacional (BFI), AUSA, and Empresa Siderúrgica José Martí seem to fit the usual plan of quarantining Cuban government assets to try to cut off hard-currency flows.

However, this new development surfaces an emerging pattern alongside the takeover of Sherritt’s nickel-cobalt operation in Cuba by U.S.-based Gillon Capital. Washington, it seems, may be doing something more than freezing assets for the sake of its own policy objectives. The U.S. administration may be increasingly matching its political goals with attempts to acquire the assets it sanctions, thus defining a new playbook in the decades-long diplomatic rift.

The approach points to a highly pragmatic (and effective) new strategy towards Cuba, where the U.S. foreign policy objective is two-fold: political and economic, and they are not mutually exclusive. Past U.S. administrations—including Trump’s own first term—have never shown this level of sophistication, coordination, and willingness to use its complete arsenal of diplomatic, economic, and legal tools to pursue its policy goals in Cuba.

The New Technique

Since May, Washington has been sanctioning the joint-venture (JV) vehicles through which Cuban SOEs partner up with foreign companies, not merely the Cuban state parents behind them.

On May 7, Moa Nickel S.A. (MNSA)—the nickel-cobalt JV operation between Sherritt and Cuba—was designated by the State Department, with language explicitly bridging to post-1959 expropriations: Moa Nickel “profits” from assets “confiscated” from U.S. persons and corporations. The rapid sequence of events that followed led Sherritt to hand a warrant to U.S.-based Gillon Capital for 55% of its nickel-cobalt JV share, at a distressed price. I previously documented that affair and its consequences.

Now, a month later, two other companies with somewhat similar situations are one cycle behind of the fate of Moa Nickel, and rapidly entering the same position Sherritt faced:

a. Antilles Gold

On June 4, OFAC designated Minera La Victoria S.A. (MLV), the joint venture between Antilles Gold and Cuban SOE GeoMinera. The venture operates a gold-silver-antimony mine and a copper-gold mine in two different locations in Cuba and holds several standalone copper concessions. On June 5, Antilles Gold requested an emergency trading halt on the Australian Securities Exchange (ASX), pending an announcement of their reasons for the request. On June 10, Antilles Gold provided the rationale for the trading halt request, arguing “uncertainty” over the “current and future impact on its assets and activities in Cuba” following sanction and designation of its JV by OFAC.

On June 18, the company confirmed it had suspended direct management and funding of MLV, while announcing it had entered “discussions” with the U.S. Department of State to “put forward a proposal” on the matter “in the near future.” On the same day, additionally, the ASX announced that Antilles Gold stock trading would resume.

Antilles Gold clearly learned from the May developments and acted much faster than Sherritt, voluntarily freezing its stock price immediately after the sanctions, and entering negotiations with the State Department thereafter. It is clear that they did so to save the JV from a cratered valuation, vis-à-vis the negotiations that are coming. That part of the problem seems to have been sorted out, given the “negotiations” announcement that followed and the lifting of the trading halt order.

However, the JV will not be saved from the same issue that sank Sherritt’s nickel-cobalt operation: once sanctioned by OFAC, accounts receivables stay frozen in the balance sheet of the JV and collectability becomes a legal issue that only the U.S. government can unlock. Thus, the door is wide open once more for a U.S.-based actor to step in and obtain U.S.-government clearance to acquire the assets.

b. Trafigura

GeoMinera’s June 23 designation hits Trafigura’s Cuba exposure directly. Possibly foreseeing the situation, Trafigura had already begun halting shipments of zinc concentrate from the Castellanos mine in western Cuba to external buyers since the MLV sanctions on June 4. Geominera’s designation now makes Trafigura’s Cuba zinc business face the same decisions Antilles Gold must make.

The JV-level designation strips the foreign partner of legal insulation. The State Department’s own language bridges the sanctions track to Title III, which the Exxon ruling—decided on the same day as Trafigura’s JV designation—has made more enforceable against all Cuban SOEs and its partners.

The Conclusion: A Mad Dash for Cuba’s Critical Minerals

Moving forward, it is not unreasonable to expect this emerging architecture to be repeated by the U.S. on a rolling basis: designate the Cuban JV, try to distress the foreign partner, and position a U.S.-aligned buyer under a non-objection blessing by the State Department and Treasury. This is now a template that the U.S. government seems to be running intently and in a highly coordinated way.

In two months, the U.S. government has paralyzed and put severe pressure on all of Cuba’s foreign-partner operators of its nickel, cobalt, gold, silver, copper, antimony, and zinc assets. With maximalist foreign policy goals at the forefront of the equation, Washington is moving swiftly to secure Cuba’s whole host of critical minerals, through a combination of timely sanctions and market opportunism that is producing compliance-driven exits by foreign partners of the Cuban government. Thus, commentary fixated on the Iran or Venezuela blueprints as analogous to Cuba is looking for clues in the wrong place.

Status: Level 3 – Execution Phase

Opening and Closing at Once: A Compliance Map and the Fate of Cuba’s 176 Measures

Cuba’s June 18 reform package and the June 23 sanctions are not disconnected from each other. Narratives to the contrary are incorrect. Both set of actions landed roughly the same week, on the same assets, from opposite directions. Havana is offering foreign investors joint-stock equity in converted state enterprises, private banking access, and less stringent state controls over the Cuban economy. Washington sanctioned the bank (BFI) through which virtually all foreign-entity transactions in Cuba clear, the offshore financial node and investment vehicle (RAFIN S.A.) of Cuba, and the logistics operator (AUSA) at Cuba’s only modern port. Investors caught between those two announcements face a compliance labyrinth that neither reforms nor sanctions alone fully explain.

U.S. Sanctions: The Renewed Old Perimeter

For U.S. persons, the Cuban Assets Control Regulations (the Embargo or CACR) remain the governing framework. Likewise, the Helms-Burton Act has emerged reinforced after the Exxon decision. Furthermore, the designations issued under E.O. 14404 and previous orders are off-limits without specific licenses, and General License 1 preserves only what the Embargo already permitted. The supposed “capitalist opening” contained in the 176 measures proposed by Havana won’t be able to change any of it, given Washington’s position against an economic opening without political reform in Cuba.

The new sanctions fall mostly on non-U.S. persons. OFAC’s Frequently Asked Questions (FAQ) 1258, issued on June 4, establishes that secondary-sanctions risk under E.O. 14404 extends to any Cuban entity 50% or more owned—directly or indirectly—even where the entity itself is not named on any list. Given that Cuban SOEs tend to monopolize all activities and assets within entire sectors, that 50% rule almost certainly means that a future “joint-stock company” in Cuba can inherit the parent’s sanctions without inheriting the parent’s name.

In other words, because Cuba’s economy is entirely dominated by a few massive, state-run monopolies, investors cannot escape the fresh class of sanctions. If one parent SOE controls an entire industry like mining or logistics, every single subsidiary, joint venture, or spin-off it touches inherits that 50% ownership rule and is automatically blacklisted.

From a compliance standpoint, list-screening alone will no longer be enough to complete due-diligence analyses. Now, compliance officers will have to ask whether the counterparty asset appears on a list and who is it that, tracing upstream, owns it.

Investment: A Two-Layer Diligence Problem

The 176 reform measures invite foreign capital, but the Helms-Burton Act revokes that invitation. Title III liability attaches to “trafficking” in property taken on or after January 1, 1959—entirely independent of any sanctions list—and the Exxon decision has clarified that suits against Cuban SOEs no longer require the plaintiff to clear the FSIA requirements. Thus, due diligence on any new Cuban joint-stock vehicle brought about by the reforms will run on two parallel tracks.

First, the sanctions track: does any parent or affiliate company qualify as an entity under the 50% rule, tested against OFAC guidance and the Cuba Restricted List?

Second, the Title III origin track: does the underlying land, plant, or concession trace to property “confiscated” from a U.S. national on or after January 1, 1959, tested against the Foreign Claims Settlement Commission registry and historical chain-of-title?

These are different methodologies, which require different expertise, and each is independently fatal to an investment. Both exercises will have to be completed before any investment commitment is made.

Final Considerations: Anti-Money Laundering (AML) and Payment Infrastructure

BFI served as Cuba's bank for foreign-entity transactions nationally, and RAFIN managed its offshore financial flows. Both are now designated under OFAC. The most immediate consequence will be that correspondent banks will de-risk Cuba-linked financial flows, pushing those transactions toward less transparent channels, which is where AML complications concentrate usually.

For non-U.S. financial institutions, the European blocking statute framework built in response to the 1996 Helms-Burton was not designed for a 2026 secondary-sanctions regime with the reach of E.O. 14404. The old strategy of avoiding U.S. dollars to safely trade with Cuba in Euros or local currencies no longer works. Under the new rules, the U.S. will completely cut a foreign bank off from the U.S. dollar network if they catch them handling any significant Cuban business, regardless of the currency used. That is, to protect their access to the U.S. financial system, overseas banks are now forced to aggressively hunt for hidden Cuban SOE owners, screen all local-currency partners, and audit their past transaction history for any hidden violations as baseline requirements, not optional enhancements.

Overall, even if Cuba’s reforms open space for foreign capital, the legal perimeter contracted much faster than the reforms will ever expand. The effects of the new round of sanctions and of the Exxon decision will outlast and outweigh whatever opportunity the reforms create. This is so because the new sanctions will create a corporate governance risk that no company will have an appetite for, and a Title III judgment, once obtained, will age into a claim against a future Cuba that may soon look very different. Investors reading only the reform announcements in Havana are missing the important half of the story.

Status: (176 Measures) Level 1 – Pre-Policy

Status: (U.S. Sanctions Enforcement Mechanism) Level 3 – Execution Phase

St Monitor | 2026-06

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Reforms Announcement vs. Sanctions Reality in Cuba | Focus: Exxon Supreme Court Ruling, June 23 Sanctions, and Cuba's 176 Reform Measures

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What the Measures Are and Where They Come From

Prime Minister Manuel Marrero Cruz presented a package of 176 measures to Cuba’s National Assembly (ANPP), which the representatives approved during its Third Extraordinary Session.¹ Raúl Castro participated via teleconference and President Díaz-Canel was present in the hall. The session was of the “extraordinary” type, held outside Cuba’s two ordinary annual legislative sessions, indicating the urgency of the matter.²

Investors relying on this package as an active legal framework are reading a proposal, not a statute. The measures are guidelines that require extensive complementary norms and specific regulations before they take effect. The 176-measure document was published in Granma—the official outlet of the Cuban Communist Party (PCC)—not as a standalone legal instrument. No related Gaceta Oficial (Cuba’s official registry) has been published as of this writing. The document is structured as a series of axes (ejes) clustering the intended reforms into thematic groups.

The reforms were pre-announced by Díaz-Canel on June 12 and backed by the Party’s Central Committee before the ANPP session. ^[3][4][5]

The Most Significant Proposals for Investors

a. Corporate structure and private enterprise (Ejes 1 and 2)

The most consequential proposal is the conversion of state-owned enterprises (SOE) into joint-stock companies (sociedades mercantiles por acciones), with the government defining its shareholding position by sector and guaranteeing majority presence only in strategic ones.⁶ Non-strategic sectors could therefore have minority state participation or none at all. Similarly, private companies would be permitted to organize as limited companies (sociedades anónimas por acciones), and a person could own stakes in multiple private businesses as well as hold equity in state-owned businesses.⁷

These axes also introduce a National Program for Asset Valuation and Title (Programa Nacional de Valoración y Titulación de Activos Empresariales Estatales), which would inventory all tangible and intangible state enterprise assets, issue enforceable ownership certificates usable as collateral for bank credit, and allow state enterprises to monetize underutilized assets through long-term leases to domestic and foreign actors.⁸ Procedures for bankruptcy, liquidation, and restructuring of loss-generating state assets are also included, marking a first in Cuban economic governance.⁹

b. Private banking (Eje 11)

Cuba would authorize private banking for the first time since 1959.^{[10][11][12][13]} The proposals allow private capital participation in the banking system under supervision of the Banco Central de Cuba (BCC), including corporate and universal banking licenses, private non-bank financial institutions for microcredit, a digital foreign exchange market with authorized agents, private currency exchange houses, and a virtual asset regulatory framework.¹⁴

On the monetary side, successive currency devaluations are explicitly proposed with an acknowledgment that enterprises unable to survive devaluation will be liquidated. The Transfermóvil mobile payments platform would receive a non-bank financial institution license. Limits on bank transfers and cash withdrawals by natural and legal persons, both national and foreign, would be eliminated.¹⁵

c. Foreign investment (Eje 14)

Surface rights would extend to 99 years and the right of usufruct beyond 50 years for foreign investors.¹⁶ Foreign-invested businesses would be permitted to open bank accounts outside Cuba without prior authorization, though a notification to BCC and ONAT (Cuba’s tax agency) would be required, thus removing the current requirement of BCC prior authorization under Law 118.^[17][18] The legal mandate to use government-appointed staff recruitment entities (entidades empleadoras)—a decades-long burden under Law 118/2014—would be eliminated.^[19][20][21] Real estate buy-sell operations for residential units, operation in foreign currencies, and “positive administrative silence” for all permitting processes in economic, financial, and commercial activities are also proposed.²²

d. Land and agriculture (Eje 7)

The reforms would allow an indefinite usufruct right to land for all economic actors—natural persons and state, private, or mixed corporations—without the previous requirement of direct and stable work on the land and without area limits.²³ This is a significant departure from the position maintained since the Agrarian Reform laws of the 1960s, where the government granted land only to small-scale producers with personal settlement intent, capped by acreage limits.^[24][25] Cooperatives would gain rights to directly manage foreign financing, open foreign bank accounts, directly export their products, and import inputs, which are activities presently routed through state intermediaries.^[26]

e. Labor reform (Eje 10)

Employers would be authorized to directly determine which workers are terminated for “economic, technological, or structural reasons” without prior administrative approval, subject to union consultation and payment of a one-time severance of three to six months’ base salary.²⁷ Remote work from abroad is permitted and the administrative prohibition on pluriempleo (multiple employment) for doctors, professors, researchers, and technical professionals would be eliminated.²⁸

For foreign investors, the removal of the staff recruiter requirement combined with greater employer flexibility on termination represents the most substantive change to the labor dimension of foreign investment in Cuba in decades.

f. Tax reform (Eje 12)

A gradual introduction of a Value Added Tax is proposed, starting with select production-consumption chains and contemplating reduced rates for basic goods and services.²⁹ The proposals also include mandatory electronic fiscal invoicing with adoption incentives, accelerated depreciation regimes for food-production and industrial-processing machinery, and a reduction of the corporate income tax burden.³⁰

A reduced income tax rate is proposed specifically for the agricultural sector.³¹ A business that declares losses for more than two consecutive fiscal periods would face a gross revenue tax as an alternative minimum, preventing the use of declared losses to avoid taxation indefinitely.³²

g. Subsidies (Eje 9)

Universal subsidies to products like fuel, electricity, cargo and passenger transport, and water tariffs would be eliminated and replaced with targeted individual subsidies.³³ This reform would affect the pricing of virtually every input used in production and commerce in Cuba and represents the most consequential macroeconomic change in the package for business operating costs.

h. Tourism (Eje 17)

All modalities of tourism-related business would be opened to foreign investors, Cuban residents abroad, and Cubans residing in the country, including leases, onerous usufruct rights, and concessions with assets.³⁴ However, real estate sales will be considered on a case-by-case basis.³⁵ Restrictions limiting auto rental to specific state enterprises would be eliminated. Travel agencies may now be constituted as 100% foreign companies.³⁶ Private tourist guides and sales agents would be authorized.³⁷ International franchises are invited to establish operations in the country.³⁸ Real estate development in tourist zones of Havana and other urban areas linked to tourism is also proposed.³⁹

The Constitutional Problem

Several proposals sit in direct tension with Cuba’s 2019 Constitution. This was not properly addressed during the ANPP debate. For example, a representative incorrectly stated that “the Constitution supports the measures.”^[40][41] This is not the case. The Cuban Constitution does the opposite of supporting the measures.

Article 18 establishes that Cuba has a “socialist economic system” based on “the [Cuban] people’s ownership over the fundamental means of production as the principal form of property, and on the [centrally] planned management of the national economy, which [monitors], regulates and controls the market.”⁴² The joint-stock conversion proposal challenges this provision’s core premise. The Constitution does not distinguish between strategic and non-strategic sectors for purposes of property. Rather, it establishes the primacy of socialist state ownership as a system-level principle.

Article 22(a) defines one of the recognized forms of property as “socialist state property of all the [Cuban] people, in which the State acts as representative and for the benefit of the people as owner.”⁴³ Article 22 overall recognizes multiple property forms, including private property, but within a system where the state retains dominant ownership over the fundamental means of production under the mandate established by Article 18.⁴⁴ Converting state enterprises to joint-stock companies with private or foreign majority stakes—even in non-strategic sectors—requires either a constitutional amendment or legislative workarounds whose validity is uncertain.

Article 23 is the key provision for land. It states that lands constituting socialist state property “cannot be transmitted as property to natural or legal persons and are governed by the principles of inalienability, imprescriptibility, and non-seizability.”⁴⁵ Critically, however, Article 23’s third paragraph allows transmission of rights that do not imply property transfer, subject to prior approval of the Council of State and provided the use serves the country’s economic and social development.⁴⁶ Thus, indefinite usufruct without area limits and without the Council of State approval pathway is therefore constitutionally debatable. In other words, Art. 23 allows usufruct rights on state land in principle, but the reform’s proposed indefinite duration, unlimited area, and open access for foreign investors pushes well beyond the conditions Art. 23 establishes.

Article 18’s definition of a “socialist economic system” does not, by itself, prohibit private banking.⁴⁷ However, when read together with constitutional provisions prioritizing state ownership over the fundamental means of production and the central role of planning, the authorization of private banks with broad corporate and universal licenses would raise significant tensions with the Constitution’s emphasis on state control over strategic sectors. Authorizing private banking with corporate and universal licenses was not contemplated by the 2019 Constitution’s drafters and has no precedent since 1960.^[48][49][50]

The government’s own acknowledgment that implementation requires several new laws, means the legislative timeline for the most ambitious changes would be measured in years, not in months or weeks.⁵¹ This is so because laws in Cuba are ANPP-level instruments that cannot be issued by executive decree between sessions. With only two ordinary ANPP sessions per year, the most transformative elements of this package will not have legal force before 2027 at the earliest, if the normal legislative process is followed.

What Currently Governs Foreign Investment in Cuba

Law No. 118/2014 remains the legal framework of foreign investment in Cuba.⁵² Its provision on mandatory use of state-appointed staff recruitment entities remains in place.⁵³ The approval of foreign investment proposals continues to flow through the Council of State, Council of Ministers, and delegated agency heads according to sector and modality.⁵⁴ The current requirement for BCC prior authorization to open foreign bank accounts similarly remains in force.⁵⁵ None of these provisions have been amended. Introducing “positive administrative silence” in the permitting and licensing processes for foreign investment requires formal overhauling of substantial bodies of complementary regulations that have yet to be drafted. Thus, the reforms package remains a highly aspirational political stance for the time being, not firm legal ground.

A Brief Political Analysis

The approval of the 176 measures should be read for what it is at this stage: unanimous endorsement by a legislature that has never voted against a Politburo proposal. The Party, on the other hand, seems to have concluded that a crisis-induced reform is preferable to the total collapse of its own governing structure. Hence, the ANPP’s vote is a political instruction to begin drafting legislation, not an enforceable legal framework.

The U.S. government has not changed its position after the announcement of the reforms. The day after the ANPP session, a State Department spokesperson called the reforms “modest, long overdue” and ultimately “superficial smoke signals” from the Cuban government.⁵⁶ The U.S. official went on to assert that Havana’s move was part of their “handbook”, and that announcing a “cycle of supposed reforms to insinuate a desire for change” would be followed by a quick “roll back” if government control was “threatened.”⁵⁷

On June 23, five days after the ANPP session, the U.S. State Department designated five additional Cuban entities pursuant to Executive Order (E.O.) 14404: three commercial and financial institutions (AUSA, RAFIN S.A., and BFI), plus GeoMinera S.A. and Empresa Siderúrgica José Martí in mining & metals.^[58][59] None of these entities are peripheral actors in the Cuban economy. BFI (Banco Financiero Internacional) handles the vast majority of transactions involving foreign entities operating in and out of Cuba. RAFIN is the offshore financial node and investment vehicle of Cuba. AUSA controls container traffic at the Mariel Special Development Zone (Cuba’s main container terminal) and runs logistics and warehousing across the island. GeoMinera S.A. is the SOE controlling exploration, extraction, and commercialization of all non-nickel minerals in Cuba. Empresa Siderúrgica José Martí (or Antillana de Acero) is Cuba’s SOE controlling steel production.

These developments indicate a clear schism in the diplomatic dispute: Havana wants time and to be in control of the privatization schedule through their intended reforms, but Washington’s impatience is leading to a scenario somewhat similar to the takeover of Sherritt’s nickel-cobalt operation in Cuba. Secretary Marco Rubio himself announced the June 23 measures, further implying that the U.S. posture demands much more from Cuba than the announcement of the reforms.⁶⁰ Thus, economic opening in Cuba without political change is insufficient by U.S.’s stated standard. Cuba’s position that it is “not abandoning socialism” leaves no room for the two sides to converge.^[61]

Overall, it is unlikely that the reforms will solve the differences between the U.S. and Cuba. This is so not only because of the disparity of priorities, but also due to Cuba’s track record on announced reforms that fail to materialize.^[62][63] The 2011 Sixth Party Congress Lineamientos (guidelines) contained ambitious language as well and produced only partial, selective implementation over a decade before running aground.^[64][65] There is no indication that this time will be different, unless further actions are taken beyond political announcements.

Final Compliance Considerations for U.S.- and non-U.S. Investors

For U.S. investors, the Cuban Assets Control Regulations (the Embargo), and the Helms-Burton Act all remain fully in force.^[66][67] Cuba’s domestic opening does not modify OFAC’s jurisdictional reach. Furthermore, Washington’s May 1, 2026 E.O. expanding Cuba sanctions creates a direct contradiction with Cuba’s intended reforms, and the June 23, 2026 designations of the five Cuban entities only confirmed the deepening of that contradiction.^[68][69]

For non-U.S. investors, the State Department warned that foreign banks and businesses servicing sanctioned entities or operating in Cuba’s energy, defense, metals, mining, or financial sectors risk being cut off from the U.S. financial system.⁷⁰ Any institution with correspondent banking relationships now faces a different risk profile than before June 23.

For investors generally, the opportunity profile is the clearest since the 1990s, in terms of what Cuba is willing to offer on paper. Whether that means anything without a corresponding shift in U.S. sanctions is a different question. Moving forward, tracking the Gaceta Oficial for actual legislative instruments—and not Granma for policy announcements—while watching the sanctions calendar in the U.S. will be the only firm ground from where to make decisions.

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© 2026 Manuel Reyes, The Southern Trade Group™. All rights reserved. Content may not be reproduced without permission.

Legal and Investment Disclaimer

This document is provided for informational and educational purposes only. Although it discusses legal frameworks, regulatory structures, and investment-related considerations, it does not constitute legal advice, tax advice, financial advice, or investment advice of any kind.

Nothing in this document is intended to create, and receipt of it does not constitute, an attorney-client relationship, advisory relationship, or any other form of professional engagement between the author and the reader. The content reflects a general overview and may not address specific facts, circumstances, or applicable laws relevant to any particular situation.

Readers should not act or refrain from acting based on any information contained herein without seeking independent advice from qualified legal, tax, and financial professionals licensed in the relevant jurisdictions.

This document does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, sell, or otherwise trade any securities, financial instruments, or assets. Any references to investment structures, jurisdictions, or regulatory regimes are illustrative only and should not be interpreted as endorsements or recommendations.

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REFERENCES LIST

^[1] Presentan Transformaciones Económicas y Sociales Ante El Parlamento Cubano (+ Cobertura Especial), Granma, June 18, 2026, https://www.granma.cu/cuba/2026-06-18/comenzo-la-tercera-sesion-extraordinaria-de-la-asamblea-nacional-del-poder-popular.

^[2] Id.

^[3] Cuba Noticias II (12 de Junio de 2026)

^[4] Central Committee of the Party Plenary Session Analyzed Economic and Social Measures in Cuba, (2026)

^[5] Note: In Cuba, it is common for legislative proposals to clear the Party’s internal approval process before reaching the legislature.

^[6] Eje 1, Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1.

^[7] Eje 1, Id.

^[8] Eje 1, Id.

^[9] Eje 1, Id.

^[10] Eje 11, Id.

^[11] Nacionalización de Los Bancos Norteamericanos (Res. 2/1960), https://archivos.juridicas.unam.mx/www/bjv/libros/5/2135/4.pdf.

^[12] Decreto-Ley No. 361/2018 (GOC-2018-629-EX58), https://www.gacetaoficial.gob.cu/sites/default/files/goc-2018-ex58.pdf.

^[13] Decreto-Ley No. 113/2025 (GOC-2025-536-O89), https://www.gacetaoficial.gob.cu/sites/default/files/goc-2025-o89.pdf.

^[14] Eje 11, Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1.

^[15] Eje 11, Id.

^[16] Eje 14, Id.

^[17] Eje 14, Id.

^[18] Art. 25.2, Ley de La Inversión Extranjera (Ley No. 118/2014), (2014), https://www.gacetaoficial.gob.cu/sites/default/files/go_x_20_2014.pdf.

^[19] Eje 14, Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1.

^[20] Art. 30.1, supra note 18.

^[21] Art. 1; 10, Reglamento Sobre Régimen Laboral En La Inversión Extranjera (Res. 16/2014), https://www.gacetaoficial.gob.cu/sites/default/files/go_x_20_2014.pdf.

^[22] Eje 14, Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1.

^[23] Eje 7, Id.

^[24] See generally, Ley de Reforma Agraria, (1959), https://faolex.fao.org/docs/pdf/cub4788.pdf.

^[25] See generally, Segunda Ley de Reforma Agraria, (1963), http://repssan.upr.edu.cu/server/api/core/bitstreams/7f220e08-4fa9-4a67-aa93-46a040d571f2/content.

^[26] Eje 7, Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1.

^[27] Eje 10, Id.

^[28] Eje 10, Id.

^[29] Eje 12, Id.

^[30] Eje 12, Id.

^[31] Eje 12, Id.

^[32] Eje 12, Id.

^[33] Eje 9, Id.

^[34] Eje 17, Id.

^[35] Eje 17, Id.

^[36] Eje 17, Id.

^[37] Eje 17, Id.

^[38] Eje 17, Id.

^[39] Eje 17 Id.

^[40] Id. (“[...] la diputada Leydis María Labrador comentó sobre el aseguramiento jurídico de las propuestas y transformaciones, teniendo en cuenta que la Constitución respalda las medidas, y consideró que, desde los fundamentos políticos de la Carta Magna, existe una manera de refrendar estas propuestas.”)].

^[41] See, Constitución de La República de Cuba, (2019), https://www.granma.cu/file/pdf/gaceta/Nueva%20Constitución%20240%20KB-1.pdf.

^[42] Art. 18, Id.

^[43] Art. 22(a), Id.

^[44] Art. 22, Id.

^[45] Art. 23, Id.

^[46] Art. 23, Id. (“... Estos bienes no pueden trasmitirse en propiedad a personas naturales o jurídicas y se rigen por los principios de inalienabilidad, imprescriptibilidad e inembargabilidad.”).

^[47] Art. 18, Id.

^[48] See, supra note 12.

^[49] See, supra note 18.

^[50] See, supra note 11.

^[51] Presentan transformaciones económicas y sociales ante el Parlamento cubano (+ Cobertura Especial), supra note 1 (“De manera preliminar, se identificó que la implementación de las transformaciones impacta a más de 148 disposiciones del ordenamiento jurídico cubano [...].”).

^[52] Art. 1.1-4, supra note 18.

^[53] Art. 30.1; 30.3, Id.

^[54] Art. 21, Id.

^[55] Art. 25.2, Id.

^[56] US Slaps New Sanctions on Cuban Companies Key to Island’s Crumbling Economy, PBS NEWS, June 23, 2026, https://www.pbs.org/newshour/world/u-s-slaps-new-sanctions-on-cuban-companies-key-to-islands-economy.

^[57] Id.

^[58] Further Sanctions on the Cuban Regime’s Revenue Generation Network, https://www.state.gov/releases/office-of-the-spokesperson/2026/06/further-sanctions-on-the-cuban-regimes-revenue-generation-network-fact-sheet.

^[59] Imposing Sanctions on Those Responsible for Repression in Cuba and for Threats to United States National Security and Foreign Policy, (2026), https://www.whitehouse.gov/presidential-actions/2026/05/imposing-sanctions-on-those-responsible-for-repression-in-cuba-and-for-threats-to-united-states-national-security-and-foreign-policy/.

^[60] Sec. Marco Rubio Announces Further Designation of Cuban Entities (June 23rd, 2026), (2026),

^[61] Díaz-Canel: “We Are Not Renouncing Socialism; We Are Transforming It to Make It Sustainable,” (2026),

^[62] See generally, Acuerdo Número VII – 61, (2011), https://www.gacetaoficial.gob.cu/sites/default/files/go_o_028_2011.pdf.

^[63] Decreto-Ley 17/2020 De La Implementación Del Proceso de Ordenamiento Monetario (GOC-2020-779-EX68), (2020), https://www.gacetaoficial.gob.cu/sites/default/files/goc-2020-ex68.pdf.

^[64] VI Congreso Del Partido Comunista de Cuba – Lineamientos de La Política Económica y Social Del Partido y La Revolución (2011), https://www.granma.cu/granmad/secciones/6to-congreso-pcc/Folleto%20Lineamientos%20VI%20Cong.pdf.

^[65] Sin Terapias de Choque y Escuchando La Voz Del Pueblo, Granma, Dec. 17, 2020, https://www.granma.cu/tarea-ordenamiento/2020-12-17/sin-terapias-de-choque-y-escuchando-la-voz-del-pueblo-17-12-2020-01-12-02.

^[66] Cuban Assets Control Regulations (CACR), (1963), https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/part-515.

^[67] Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Helms-Burton), (1996), https://www.govinfo.gov/content/pkg/PLAW-104publ114/pdf/PLAW-104publ114.pdf.

^[68] supra note 59.

^[69] supra note 58.

^[70] Id.

Una campaña de presión coordinada por parte de EE.UU. contra Cuba está afectando a la minera canadiense Sherritt International. La empresa es un daño colateral en una operación que, como efecto secundario, reposiciona los intereses estratégicos de EE.UU. en los activos cubanos de níquel y cobalto. Las reservas de níquel y cobalto de Cuba se encuentran entre las más grandes del mundo.

El 1ro de mayo de 2026, la administración Trump emitió una orden ejecutiva que amplió las sanciones contra Cuba, e incluyó la empresa mixta de Sherritt International con el gobierno cubano—General Nickel Company, S.A. “GNC”—para la producción de níquel y cobalto en Moa, en el oriente de Cuba.

El 7 de mayo, Sherritt suspendió formalmente su participación directa en la empresa mixta de Moa. La directora financiera (CFO) de la compañía canadiense, Yasmin Gabriel, y su auditor de larga data, Deloitte, renunciaron poco después. El 15 de mayo, Sherritt incumplió el plazo para reportar sus resultados de primer trimestre (Q1) ante la Comisión de Valores de Ontario (OSC). Para el 19 de mayo, Sherritt ratificaba públicamente su intención de disolver la empresa mixta en Cuba lo más rápido posible, buscando específicamente informar a las autoridades estadounidenses y a otras partes interesadas con el anuncio.

El 20 de mayo, el Fiscal General interino de EE.UU., Todd Blanche, acusó formalmente al líder cubano Raúl Castro por su presunto rol en el derribo de una aeronave civil en el Estrecho de la Florida en 1996. Ese mismo día, Sherritt revirtió su decisión de disolver la empresa mixta y anunció un acuerdo de intenciones no vinculante con Gillon Capital, LLC (Gillon). Esta firma es la oficina familiar (family office) de Ray Washburne, exdirector de la OPIC (Corporación de Inversiones Privadas en el Exterior, 2017-2019) durante el primer mandato de Trump, exmiembro del Consejo Asesor de Inteligencia del presidente Trump, vicepresidente del Comité de la Victoria de Trump en 2016, exasesor del Comando Sur de las Fuerzas Armadas de EE.UU. y donante prominente del Partido Republicano. Gillon adquiriría una participación mayoritaria del 55% mediante un instrumento privado de opción de compra de acciones (equity warrant), a precio de descuento respecto del precio de cierre (C$0.11) del 15 de mayo.

El 21 de mayo, la OSC emitió una Orden de Cese de Operaciones por Incumplimiento de Reportar (FFTCO) contra Sherritt, bloqueando todas las operaciones comerciales que incluyan acciones de la compañía. Es aquí donde las salidas del auditor Deloitte y de la CFO de Sherritt podrían ofrecer algunas pistas. El gobierno cubano le adeuda a Sherritt 368 millones de dólares en un término de cinco años (2023-2027), pagaderos en especie, con cobalto de la empresa mixta en Moa. Esa cuenta por cobrar permanece en la contabilidad de Sherritt.

Bajo la nueva arquitectura de sanciones de Washington, las preguntas de si esa cuenta por cobrar es recuperable, cómo debe valorarse y si las transacciones para cobrarla constituirían operaciones prohibidas permanecen sin respuesta. Deloitte no puede firmar estados financieros que contengan una cuenta por cobrar de carácter material cuya recuperabilidad y condición jurídica no puede evaluar. Asimismo, un CFO no renuncia en momentos de máxima presión a menos que no pueda respaldar las cifras o que una situación particular le genere un escenario de responsabilidad personal. No es descabellado imaginar una situación en que la junta directiva y la CFO discreparan en cuanto a cómo caracterizar la posición financiera de la compañía en el contexto de la transacción con Gillon y de la reversión de la disolución de la empresa mixta.

El Departamento de Estado y el Tesoro de EE.UU. han confirmado que no objetan en contra de las negociaciones. Sin embargo, la no objeción del gobierno estadounidense al acuerdo con Gillon no constituye una autorización legal para que Sherritt continúe operando en Cuba. Esto difiere sustancialmente de emitir una licencia específica que proteja a Sherritt, a Deloitte o a cualquier directivo frente a las sanciones OFAC. Dicho de otro modo, la no objeción solo aborda si Gillon puede adquirir Sherritt; no aborda si las cuentas por cobrar cubanas son legalmente recuperables, si las transacciones para cobrarlas están autorizadas, o si un auditor que certifique su valor se expone a algún tipo de responsabilidad personal.

En conjunto, el gobierno de EE.UU. ha preaprobado esencialmente una estructura mediante la cual un operador político vinculado a Trump adquiere el control mayoritario de las acciones de Sherritt en Cuba a precio de remate, con el beneplácito del Departamento de Estado y el Tesoro, sin hacer nada al mismo tiempo para resolver la ambigüedad jurídica que está erosionando la gobernanza corporativa de Sherritt. La no objeción parece deliberadamente selectiva: protege únicamente la transacción de Gillon; no protege a nadie que deba certificar la posición financiera actual de la empresa en el proceso de la transacción per se. Si se le hubieran dado garantías a la CFO y a Deloitte, el precio de las acciones de Sherritt podría haberse estabilizado, lo que tal vez hubiera mejorado su posición negociadora frente a Gillon y, a su vez, haberle costado más dinero a Washburne.

Además, la FFTCO crea una paradoja que beneficia considerablemente a Gillon. Gillon no está comprando acciones de Sherritt a través de la Bolsa de Valores de Toronto (TSX). Gillon está recibiendo un instrumento privado de opción de compra de acciones—ejecutable en un plazo de nueve meses a partir del cierre—que le otorga el derecho de adquirir suficientes acciones de nueva emisión para alcanzar el 55% de la propiedad. Por lo tanto, la FFTCO no cancela automáticamente el mecanismo de colocación privada. Cuando se levante la FFTCO que pesa sobre Sherritt y se reanuden las operaciones con sus acciones, el precio de mercado podría ser incluso inferior a C$0.11, teniendo en cuenta los acontecimientos desde el 15 de mayo y el continuo deterioro de la situación en Cuba. Esto significa que Gillon podría renegociar a la baja el precio del ejercicio si el acuerdo se formaliza. Con las operaciones de Sherritt suspendidas, no existe un precio de mercado actualizado, lo que juega a favor de Gillon.

En general, EE.UU. está ejerciendo máxima presión legal y diplomática sobre el gobierno cubano, a la vez que un operador político vinculado a Trump adquiere control de una importante operación de minería y refinación en Occidente a precio de liquidación. Sherritt probablemente sufrirá golpes financieros y de reputación sustanciales, una vez resuelto el asunto. El destino de la operación cubana, no obstante, parece estar firmemente establecido en los planes del gobierno de EE.UU. para fortalecer su seguridad nacional en minerales críticos, como producto secundario de su posición hostil hacia Cuba.

La versión original de este artículo se publicó en Inglés, el 4 de Junio de 2026. Esta traducción al español se ofrece como cortesía al público hispanohablante.

El artículo original “BRIEFING NOTE | Sherritt’s Collapse in Cuba Opens Path for U.S. Distressed Acquisition” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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A coordinated U.S. pressure campaign against Cuba is affecting Canadian miner Sherritt International. The company is collateral damage in a play that, as a second-order effect, re-positions U.S. strategic interests in Cuban nickel-cobalt assets. Cuba’s nickel-cobalt reserves are among the largest in the world.

On May 1, 2026, the Trump administration issued an executive order expanding sanctions against Cuba, including Sherritt International’s joint venture (JV) with the Cuban government (General Nickel Company, S.A. or “GNC”) to produce nickel and Cobalt in Moa, Eastern Cuba.

On May 7, Sherritt formally suspended its direct participation in the Moa JV. The Canadian company’s CFO, Yasmin Gabriel, and long-time auditor Deloitte resigned soon after. On May 15, Sherritt missed its Q1 filing deadline with the Ontario Securities Commission (OSC.) By May 19, Sherritt further updated its push to dissolve the JV as soon as possible, with the express intent of informing U.S. authorities and stakeholders.

On May 20, Acting U.S. Attorney General Todd Blanche indicted Cuban leader Raúl Castro over his alleged role in the shootdown of a civil aircraft in the Florida Strait in 1996. On the same day, Sherritt reversed the dissolution decision and announced a non-binding term sheet with Gillon Capital LLC (Gillon.) This firm is the family office of Ray Washburne, the former head of OPIC (Overseas Private Investment Corporation, 2017-2019) in Trump’s first term, former member of Trump’s Intelligence Advisory Board, vice chairman of the Trump Victory Committee 2016, former advisor to the U.S. Military Southern Command, and major Republican fundraiser. Gillon would acquire a 55% controlling stake via warrant at a discount to the May 15 closing price of C$0.11.

On May 21, the OSC issued a Failure-To-File Cease Trade Order (FFTCO) against Sherritt, effectively blocking all trading of the company’s stock. This is where the flight of auditor Deloitte and Sherritt’s CFO might offer some clues. Sherritt is owed $368 million by the Cuban government over five years (2023-2027), paid through a cobalt swap from their venture operation in Moa. That accounts receivable remains on Sherritt’s balance sheet.

Under the new sanctions’ architecture, the questions of whether that receivable is collectible, how it should be valued, and whether transactions to collect it would constitute prohibited dealings are unclear. Deloitte cannot sign financial statements containing a material receivable whose collectability and legal status it cannot assess. Likewise, CFOs do not resign at moments of maximum pressure unless they either cannot stand behind the numbers or a particular situation creates personal liability exposure. It is not unreasonable to imagine a situation where the board and the CFO disagreed about how to characterize the company’s financial position in the context of the emerging Gillon transaction and the dissolution reversal.

The U.S. Department of State and U.S. Treasury have both confirmed they do not object to the negotiations. However, the U.S. government’s non-objection to the Gillon deal does not constitute a legal authorization for Sherritt to continue running its Cuba venture. This is meaningfully different from issuing a specific license that protects Sherritt, Deloitte, or any individual officer from OFAC enforcement liability. In other words, the non-objection addresses whether Gillon can buy Sherritt; it does not address whether the underlying Cuban receivables are legally collectible, whether transactions to collect them are authorized, or whether an auditor certifying their value is exposing itself to liability.

Taken together, the U.S. government has essentially pre-approved a structure in which a Trump-connected operator acquires control of Sherritt’s equity in Cuba at a distressed price, with State Department and Treasury blessings, while simultaneously doing nothing to resolve the legal ambiguity that is destroying Sherritt’s corporate governance. The non-objection, as it turns out, seems deliberately selective: it protects the Gillon transaction alone; it does not protect anyone who has to certify the company’s existing financial position on the way to that transaction. Had the CFO and Deloitte been given assurances, Sherritt’s stock price may have stabilized, which may have improved its negotiating position with Gillon, which in turn may have cost Washburne more money.

Furthermore, the FFCTO creates a paradox that benefits Gillon considerably. Gillon is not buying Sherritt shares through the Toronto Stock Exchange (TSX.) Gillon is receiving a warrant—exercisable within nine months of closing—that gives it the right to acquire enough newly issued shares to reach 55% ownership. Thus, the FFCTO does not automatically kill the private placement mechanism. If and when the FFCTO is lifted and trading resumes, the market price may be even lower than C$0.11, given everything that has happened since May 15 and the continuous deterioration of the situation on the ground. This means Gillon may be able to renegotiate the exercise price downward if the deal formally closes. With trading halted, there is no updated market price, which plays to Gillon’s favor.

Overall, the U.S. is exerting maximum legal and diplomatic pressure on the Cuban government, while a Trump-connected operator acquires control of a significant Western mining and refining operation at clearance price. Sherritt will likely take a substantial financial and reputational hit after the matter is resolved. The fate of the Cuban operation, however, seems to be firmly in the plans of the U.S. government to enhance their critical minerals security, as a byproduct of their hostile position against Cuba.

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In this Edition | May 2026

Political decisions and market pressures in Latin America are reshaping control of resource extraction and allocation in several countries. These include governance failures, development priorities, and electoral transitions. This month’s edition covers four situations where reshaping of natural resources control, capital allocation, and revenue inflows are actively underway, at different stages of resolution.

In Colombia, Ecopetrol’s governance crisis has reached an impasse under Petro, and incoming administrations face inherited damage that is unlikely to be corrected quickly, regardless of who wins the upcoming presidential elections. In Argentina, Milei’s Super RIGI arrives in Congress as a USD 1 billion greenfield investment with aggressive deregulation, and a provincial adhesion mechanism that may prove more decisive than the congressional vote. In Guyana and Suriname, oil revenue management at scale is increasingly becoming both countries’ priorities, with Suriname now securing the financing to follow Guyana’s playbook offshore.

The ST Monitor proprietary classification is applied to interpret specific developments across Latin America based on their phase of execution. Some plans remain at the level of (1) political signaling without an operational framework; others are (2) constrained within permission-based systems; and others are (3) fully operational and institutionalized. The cases chosen for this edition should be read through that lens:

Level 1 — Pre-policy (no executable framework exists)

Level 2 — Constrained execution (activity exists but is permission-bound)

Level 3 — Execution Phase (system is operational and institutionalized)

Colombia: Ecopetrol’s Governance Crisis Reaches Its Logical End

The Ecopetrol governance crisis has moved beyond board dysfunction into institutional paralysis right at the gates of a presidential election in Colombia. The institutional drift of the largest company in the country may have serious impacts on Colombia’s fiscal health, if the situation is not corrected by the next administration.

On May 26, Ecopetrol’s CEO Ricardo Roa filed a medical leave notice with the company’s board, which approved a 30-day extension of his absence. Combined with existing vacation and unpaid leave already authorized, Roa will not return to the presidency of the SOE until July 27, 2026. The date falls within two weeks before Petro’s government ends. Thus, the executive that Petro installed as president of Colombia’s most important company, and whose conflicts of interest have been the subject of two criminal indictments by the country’s Attorney General, may return to his post barely a moment before the entire political architecture that protected him dissolves.

Additionally, on May 12, Juan Gonzalo Castaño resigned from Ecopetrol’s board. Castaño had, over time, taken positions that distanced him from Petro on two sensitive questions: he voted against Ecopetrol exiting the Permian Basin position, and he was part of the board majority that approved Roa’s temporary removal. His resignation may not be a voluntary departure after all, and rather just another interference by the Petro administration, enforcing board loyalty to the executive.

The Colombian elections will be decided on May 31, and a run-off may ensue on June 21 if needed. It is upon the winner to decide how to stabilize and reform the company they inherit. Ecopetrol is listed in the New York Stock Exchange (NYSE), and therefore exposed to SEC disclosures, DOJ and FCPA jurisdiction, among others. To reverse course, the new Colombian executive may need to address the exploration moratorium (including a fracking ban), the circumstances of the Crown Rock project exit, or the previous en-masse executive departures of the Petro era.

The candidates for the Colombian Presidency represent differing levels of engagement with the petroleum industry. Leading the polls is Senator Iván Cepeda, a committed left-leaning ideologue, often described as much more intransigent than Petro in his support for an assertive government or on his position against hydrocarbons. Likewise, Cepeda is expected to continue Petro’s policy of “Paz Total” (Total Peace), where the insurgent groups within Colombia are no longer considered to be motivated by ideology, only profit and criminal interests. Criminal activity and violence by insurgent groups has surged under the Petro administration.

If Paz Total remains the position of a prospective Cepeda administration, then onshore operations in Colombia’s E&P activities will remain subject to a risk premium for longer. This is so because if the State no longer sees insurgent groups as motivated by ideology and still decides to engage in negotiations with them, then the government is effectively renouncing its role as guarantor of security over its own territory. That is, the State is recognizing criminal groups as legitimate interlocutors in an official dialogue over the groups’ rights. This is not to say that an enforcement approach should be prescribed instead, just that Paz Total elevates the status of what should now be considered common criminals, if such insurgent groups no longer harbor political aspirations.

Taken together, Ecopetrol remains burdened by severe weaknesses in governance. Furthermore, it is unlikely that a change in Colombia’s presidency will mean a short-term solution to the company’s crisis or to its mid-term outlook. This is especially so under a future Cepeda Administration, who may be hostile toward the petroleum industry and lenient towards criminal activity within Colombian territory. Finally, it is also not clear that trailing candidates Paloma Valencia or Abelardo de la Espriella—although friendlier toward hydrocarbons—have answers to the company’s woes or the country’s political pressures.

Overall, Ecopetrol faces internal challenges and political problems that may continue to affect the company’s performance, and in a worse case scenario, even threaten institutional continuity.

Status: Level 2 — Constrained execution

Argentina: The Super RIGI Arrives in Congress, Milei Flexes Executive Muscle

Argentina’s executive submitted the Régimen de Incentivo para Grandes Inversiones en Nuevas Industrias (Super RIGI) to the Chamber of Deputies on May 26. The new regime sets a USD 1 billion minimum investment threshold, a 15% corporate tax rate, full import and export duty exemptions, unlimited loss carryforwards, and a 30-year tax, customs, and FX stabilization guarantee locked in as an acquired property right from the moment of adhesion.

The regime targets new industries that do not currently exist in Argentina or are in the experimental stage. Only greenfield projects will be considered. The original RIGI, enacted via Ley Bases in 2024, is explicitly excluded. The executive has singled out AI, semiconductors, advanced biotechnology, and digital infrastructure as strategic targets.

The passage of the draft law is likely, but not guaranteed. The Milei government does not currently hold a simple majority in either chamber of Congress. Thus, the critical path may run through governors, not legislators per se. Provinces must adhere individually, and governors who adhere will get projects while those who do not get nothing. To this effect, it is important to note that the draft law allows early adhesion by the provinces, independent of the voting process in Congress.

There is the carrot and stick mechanism by the Milei administration: Adhere early and get federal backing for local development; reject adherence and risk neglect from the executive. This binary choice embedded in the logic of the draft law may well come to define the political process ensuing submission. That is, provincial appetite for the perks of the draft law may tip the balance for or against the law, in lieu of strong Congressional support. Adherence from Buenos Aires (CABA) or Córdoba, for example, would be early indicators of viability.

Consequently, the Super RIGI’s deregulatory push is setting up a political fight in Argentina, not just over investment rules, but also over where capital will actually land in the country. The Milei administration is already negotiating directly with governors, pitching the regime as a provincial development tool to either pressure Congress to sign off on it or bypass the legislature altogether by securing enough provincial adherence before passage.

In that sense, the Super RIGI may end up reading less like an investment regime and more like a map of winners and losers across Argentina. Ironically, the most libertarian president in Argentina’s recent memory is arguably availing himself of the centralizing powers of federalism to bind local and national autonomy to his political agenda. That is, Milei is seeking to override congressional powers and recalcitrant provinces by forcing them to opt into his plan or be left out completely of major economic investments in the future. The draft law is, in practice, a maximalist political stance, despite its veneer of congressional procedure.

Whether the law passes with amendments or not, its spirit will remain the same: aggressive deregulation of the role of government as an economic and administrative actor, and gradual relaxation of capital controls.

I published a special report with full primary source legal analysis on May 27. All components regarding the draft law, including compliance implications for foreign investors, eligibility requirements, tax regime, dispute resolution mechanisms, and FX and capital controls are discussed in detail.

Status: Level 1 — Pre-policy (pending congressional approval and provincial adhesion)

Guyana’s Oil Output in Crescendo, Suriname Eager to Follow

Guyana

Guyana’s government reported its oil lift revenue for Q1 2026. The numbers were published in early April by the Natural Resource Fund (NRF): $761M. That tallies to well over three-quarters of a billion dollars in 90 days, in a country smaller than Idaho, with a population of barely one million people.

For a nation with historically low levels of institutional organization, the present-day Guyanese government’s ability to capture and manage oil revenue in an organized and relatively transparent manner is no small feat.

From an institutional standpoint, Guyana appears to be rapidly transitioning away from a small, low-capacity state with a commodity-based economy, chronic political fragmentation, and a thin administrative apparatus into a much more organized, rent-absorbing petrostate in rapid formation.

Before the Stabroek discovery in the 2010s, Guyana struggled with a minimal industrial base, economic activity oriented mostly toward sugar, rice, and gold mining, and contentious politics. Now, the oil riches guarantee revenue, but pose the question of whether the government can develop the absorption capacity for hydrocarbon rents in the long term, while politics remain fractured along ethnic lines and special interest groups.

The monthly inflows report from the NRF confirm the upward trend. The Stabroek Block brought the Natural Resource Fund (NRF) balance above USD 4.1 billion for the first time by early May, as a combination of oil revenue, royalties, bonuses, and interest income. Guyana has gone from a $4.28 billion GDP in 2015 (when Exxon first announced the Liza-1 discovery) to $24.66 billion in 2024. Its debt-to-GDP ratio (29.2%) and inflation levels (4.1%) are considered manageable and well within what the oil rents can absorb.

Overall, in its first decade since the oil discoveries, Guyana seems well-adjusted to the newfound oil bonanza, including by both fostering oil production growth and putting in place a basic fiscal mechanism to manage the revenue inflows. The country produced 830,000 bpd in 2025 and expects to expand further this year to 840,000 bpd.

Status: Level 3 – Execution Phase

Suriname

Staatsolie, Suriname’s state-owned oil company (SOE), raised $516M through their 2025-2033 bond scheme and also secured a $1.6 billion syndicated loan from a “consortium of 18 banks and financial institutions.” This development has not received much coverage from traditional outlets, with few exceptions.

The news appeared in Staatsolie’s 2025 Annual Report, released in mid-May. Paramaribo appears to have carefully studied its neighbor’s success and wants to reproduce Georgetown’s playbook in the offshore upstream.

Staatsolie’s institutional capacities are neither underdeveloped nor unexperienced. This company has been extracting conventional oil in Suriname for decades. In 2025 Staatsolie produced a modest 17,400 bpd onshore, which entails a certain baseline of technical development and a skilled workforce in place. The SOE has associated itself with a number of international oil companies (IOCs) for E&P activities offshore, especially in the Gran Morgu project (Block 58), a deepwater play that could yield up to 220,000 bpd at peak production, once online. French Total Energies is the project’s main operator and Staatsolie reserved a 20% stake option for itself. Drilling is expected to start in Q4 2026.

However, Suriname faces several institutional challenges that could hinder its ability to harness and manage future oil riches—including patronage networks inside the government, driven by ethnic-based clientelism. Suriname’s bureaucratic structure is inefficient and bloated and suffers from low-credibility among its citizenry. Likewise, legacies from the Bouterse era remain entrenched administrative practices, including the government’s outsized role as an economic actor and distrust of the private sector through regulatory barriers to growth.

Overall, Suriname has the political will to expand the petroleum industry and become a net oil & gas exporting nation in the medium term. Nevertheless, although plans to expand offshore E&P activities are in place, Suriname’s weak regulatory environment and clientelism may prevent the country from realizing its productive capacities in the immediate future.

Status: Level 2 — Constrained execution

Other Relevant News to Observe:

• Venezuela | Debt Restructuring Announcements: The Venezuelan government announced plans to restructure its debt, but this remains at the preparatory stage only, as full negotiations are still blocked by OFAC sanctions.

  • Watch for: Any further OFAC licenses that would allow actual creditor engagement versus continued legal posturing. It is clear by now that there is a political will in Washington to rehabilitate Caracas into the global financial system, but progress is not guaranteed and each action by the Trump administration on Venezuela should be carefully analyzed before taking it at face value.

• Brazil | Oil Royalties Dispute at Supreme Court (STF): Brazil’s Supreme Court resumed hearings on the constitutionality of the 2012 oil royalties’ distribution law, a case with major fiscal implications for producing vs. non-producing states.

  • Watch for: a decision favoring non-producing states. Revenue certainty for producing states is the main factor for IOCs at the time of
    investing. The 2012 royalties law gives producing states a larger share of pre-salt oil revenues. Producing states will lose substantial income if the STF rules in favor of greater redistribution to non-producing states. This may translate to higher local taxes or royalties demanded from operators to compensate for lost funds, and weaker local infrastructure investment (ports, roads, workforce training) that supports offshore operations.

• Brazil | PPSA Delays and Scales 6th Oil Auction: Brazilian state-owned PPSA has postponed the 6th Pre-Salt oil auction from July to August 2026, citing the need for more stable market conditions. The agency is also considering increasing the volume on offer from 106 million barrels to 110–115 million barrels and may split the process into two separate auctions.

  • Watch for: Indications of what PPSA considers “more stable market conditions” and whether the delay leads to better terms, or on the contrary, if it signals growing caution by Brasília amid the Hormuz crisis effects on international reserves and whether Brazil may be planning to hedge for a supply crunch, particularly at a delicate fiscal and regulatory time ahead of elections.

St Monitor | 2026-05

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Resources Realignment Under Political and Market Pressures in Latin America | Focus: Colombia’s Ecopetrol, Argentina’s Super RIGI, Guyana’s and Suriname’s Oil Industry

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What is the new “Super RIGI”?:

Argentina’s executive branch submitted a draft law to the Chamber of Deputies (the equivalent of the U.S. House of Representatives) establishing the Régimen de Incentivo para Grandes Inversiones en Nuevas Industrias (“Super RIGI”) for legislative debate and approval.

Signed by President Javier Milei, Economy Minister Luis Caputo, and Cabinet Chief Manuel Adorni on May 22–23, 2026, the bill is the third legislative package Milei has sent to Congress since the start of the ordinary session period. This draft bill is an upgrade of the original RIGI mechanism first enacted as part of the Ley Bases (omnibus bill), but limited exclusively to genuinely new industries, which either do not currently exist in Argentina or are in experimental or pilot stage. If an investor ran a project under the original RIGI, they are out of this new regime.

The draft law defines eligible industries broadly.^[1] The executive, on the other hand, signaled AI, semiconductors, advanced biotechnology, and digital infrastructure as paradigmatic targets in the transmittal message, and Caputo has separately indicated additional priority sectors in press communications that carry no statutory weight.^[2] The new regime is not available for the expansion, modernization, or reconversion of existing facilities.^[3] Only greenfield projects will be considered.^[4][5]

Who Can Apply

Applications open FIVE years from the date the implementing regulations take effect,^[6] with a single possible ONE-year extension by executive decree. Eligible parties must constitute a Vehículo de Proyecto Único (VPU)—a special purpose vehicle with a single object and assets dedicated exclusively to the project.^[7] The structures permitted include Argentine corporations (S.A., S.A.U., S.R.L.),^[8] branches of foreign companies registered under Article 118 of the General Corporations Law,^[9] joint ventures (JV),^[10] and other associative contracts.^[11]

For U.S. investors, the branch route and the JV structure may be the most efficient entry points.

Disqualifying conditions include: anti-corruption convictions confirmed at the second instance level under Law 27.401 (Argentina’s corporate criminal liability statute, perhaps the closest domestic analog to the FCPA),^[12] tax or customs violations confirmed on appeal, outstanding firm tax debts, and bankruptcy,^[13] or Director/officer-level convictions within corporate structures.^[14]

Any overlap with a pending original RIGI application—including via related parties sharing more than 50% of CAPEX, physical assets, or production capacity—also disqualifies the prospective investor. The regime is designed to be hermetically separate from its predecessor.

Investment Threshold

Minimum qualifying investment: USD 1 billion in computable assets per project.^[15] Real estate can count for no more than 15% of that threshold.^[16] Within the first two years from the Adhesion Date, the investor must commit at least 20% of the total minimum, or USD 200 million, in computable assets.^[17][18] Financial assets and inventory are excluded from computation.

The Adhesion Date is the date the approving administrative act is notified to the VPU, and from that date the investor’s rights vest as an acquired right with property-level protection.^[19][20]

The application process is documented and exhaustive: investors must submit (a) project description, (b) corporate data, (c) investment schedule, (d) a sworn technical declaration that the activity is genuinely new in Argentina, (e) a sworn statement that the project will not distort the local market, (f) an independent economic-financial feasibility report, (g) a technical feasibility report, and (h) a foreign exchange balance demonstrating the project will not generate net foreign currency demand.^[21][22]

The reviewing authority has 90 business days to approve or reject.^[23] Rejection cannot be appealed but the project may be resubmitted up to twice within the same calendar year.^[24] There is also a requirement of mandatory self-reporting of foreseeable non-compliance within 10 business days.^[25]

Tax Package

Corporate income tax is fixed at 15%, against Argentina’s standard rate of 25%.^[26][27]

Accelerated depreciation applies: movable assets can be fully amortized in TWO years; infrastructure investments can be written off 60% in the year of commissioning and 40% over the following TWO years.^[28] Loss carryforwards are unlimited in time—and after FIVE years without absorption, they can be transferred to third parties, which opens a secondary market for tax attributes.^[29][30][31] The bank debit and credit tax is 100% creditable against income tax.^[32] Likewise, the draft treats all income tax calculations as fully IPC-indexed for VPUs,^[33] which will enter into conflict with the restriction in Article 93 of the general Income Tax Law.^[34] The latter is a protection that may be critical in Argentina’s inflation context.

On distributions: dividends and profit remittances are taxed at 7% for the first FOUR years post-Adhesion, dropping to 3.5% thereafter.^[35][36]

Import and export duties: there is a full exemption for capital goods and inputs forming part of the approved investment plan, and full export duty exemption for products generated by the project.^[37][38][39] This is categorical and non-waivable by any subsequent regulation.^[40]

One notable item for international investors: Article 45 contains a carve-out for the OECD/G20 Pillar Two global minimum tax.^[41][42] To the extent Argentina’s 15% rate would trigger a top-up tax in the investor’s home jurisdiction under Pillar Two income inclusion rules, the Argentine incentive will not apply, thus preventing Argentina’s benefit from simply being transferred to a foreign treasury. For U.S. investors whose parent companies may be subject to GILTI or future Pillar Two frameworks, this provision may require careful tax structuring at the outset.^[43][44]

FX and Capital Controls

The Super RIGI offers a staged currency liberalization locked in contractually.

Export proceeds from the project are exempt from the obligation to repatriate and liquidate in the exchange market on a graduating scale—20% free from year one of first export, 40% from year two, 100% from year three.^[45] Capital contributions, external financing, and service payments face no repatriation or liquidation obligation at all.^[46] Dividend remittances are freely accessible to the exchange market without prior BCRA approval, provided the underlying investment entered through the exchange market.^[47]

All of the above is stabilized for 30 years from the Adhesion Date.^[48] If a future Argentine government imposes controls more restrictive than those in place at Adhesion, the VPU may reject their application by presenting its adherence certificate.^[49] The burden shifts to BCRA to prove no violation occurred before any summons proceeding commences.^{[50][51][52][53]}

Dispute Resolution and Treaty Interface

Chapter XI of the draft regulates jurisdiction and arbitration. It explicitly allows disputes between the Argentine State and VPUs to be resolved through international arbitration after a 60-day amicable negotiation period.^[54][55] Most importantly, it provides that the rights and incentives acquired under the Super RIGI “shall be considered protected investments” within the meaning of Argentina’s Bilateral Investment Treaties (BITs).^[56] This includes the 1991 U.S.-Argentina Treaty on the Promotion and Protection of Reciprocal Investments, which provides for ICSID arbitration and investor-state dispute settlement. Thus, U.S. investors benefit from treaty-level protection for their Super RIGI rights from the moment of adhesion.

Provincial Adhesion: The Federal Variable Within Argentina

The regime is national in scope but requires express provincial adhesion for any project located in a given province. A province that does not adhere cannot host a Super RIGI project, as its residents will not be able to access the national incentives. Provinces that adhere must also restrain their own fiscal demands: any local norm that limits, restricts, or interferes with Super RIGI rights and incentives is declared null and void from inception.^[57]

The provinces most likely to adhere quickly may be those with existing tech infrastructure, administrative capacity, and political alignment with the Milei agenda: the City of Buenos Aires (CABA), Córdoba, Mendoza, and Neuquén. The last two are particularly relevant for mining-processing projects and energy-adjacent tech respectively. Provinces that are politically distant from La Libertad Avanza, heavily dependent on Ingresos Brutos revenues (provincial gross turnover tax) from industry, or in active budget negotiations with the national government—Chaco, Formosa, perhaps Santa Cruz in the near term—are the least likely to adhere without significant political pressure or fiscal compensation.

Compliance Considerations for U.S. Investors

The disqualification provisions of Article 8 are directly compatible with FCPA pre-investment due diligence requirements: conviction under Law 27.401 disqualifies a VPU at the membership level, including directors and officers.^[58][59][60] This means a U.S. company investing via a VPU has a built-in incentive to conduct FCPA-grade screening of all Argentine participants, since a local partner’s corruption conviction—even unrelated to the project—can terminate the regime’s benefits retroactively.

The transfer pricing provisions of Article 42 require arm’s length pricing for all intra-group transactions, which is consistent with both OECD standards and IRS Section 482 expectations.^[61][62] Cost-sharing agreements are explicitly subject to arm’s length standards. This is favorable for compliance: the new regime does not create opportunities to shift income through non-arm’s-length structures without regulatory scrutiny.

For SEC reporting purposes, a USD 1 billion minimum investment by a U.S. issuer is presumptively material and requires disclosure in Forms 10-K and 10-Q.^[63][64] The 30-year stabilization commitment may also require disclosure as a long-term contractual obligation affecting future operations.

Anti-money laundering (AML) exposure is concentrated at the FX layer: the free disposition of export proceeds and the absence of repatriation obligations for capital accounts create conditions where additional know-your-transaction monitoring will be required, particularly where financing chains involve multiple intermediate jurisdictions.^[65][66][67]

A Brief Political Analysis of Super RIGI’s Chances to be Passed Into Law

The Super RIGI arrived in Congress yesterday under mixed conditions for its passage. The Milei administration does not hold majority in either the Chamber of Deputies or the Senate. The original RIGI passed via Ley Bases only after extended and contentious negotiations with provincial blocs and centrist opposition. The new submission occurs in a period of internal tension within the ruling coalition, with disputes between Santiago Caputo^[68] and Martín Menem, and reputational damage from the Adorni patrimony case.

The government has begun negotiating directly with governors to secure approval, framing the Super RIGI as a vehicle for provincial development—mining-processing, AI infrastructure, energy tech—in jurisdictions that feel excluded from Argentina’s existing investment map. That negotiation process may prove critical to the passage of the draft into law. Governors who adhere get projects; governors who don’t adhere do not. That political leverage may be exerted in order to obtain compliance from the Provinces to a certain extent.

The opposition will likely contest the fiscal cost of the tax incentives, the loss of Ingresos Brutos revenue for adhering provinces, and the scope of the export duty exemption. These are legitimate technical objections, not ideological ones, and they may be negotiable.

However, the real concern is not congressional opposition per se. Rather, the pitfalls of passage may manifest in the internal discipline of La Libertad Avanza’s coalition, which has shown periodic fractures under legislative pressure. The government’s decision to bundle the Super RIGI with three other politically lower-controversy bills (lobbying regulation, gambling addiction, front-of-package labeling) is a deliberate packaging strategy: it creates a legislative vehicle where opposition can extract concessions on the other bills in exchange for movement on the Super RIGI, rather than forcing an isolated vote on a USD 1 billion investment threshold that plays poorly in a country with nearly 40% of its citizens below the poverty line.

Passage may remain more likely than not for now, but not within a timeline of weeks. It is possible, however, that the negotiation with governors may determine the timeline more than the floor debate itself. Provinces that adhere before passage—which the law permits in anticipation—could give the government some political momentum.

If three or four economically significant provinces declare adhesion before the congressional vote, the remaining opposition may become harder to sustain. It would not be unreasonable to watch for early adhesion signals from CABA and Córdoba as the leading indicators of the new regime’s viability.

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© 2026 Manuel Reyes, The Southern Trade Group™. All rights reserved. Content may not be reproduced without permission.

Legal and Investment Disclaimer

This document is provided for informational and educational purposes only. Although it discusses legal frameworks, regulatory structures, and investment-related considerations, it does not constitute legal advice, tax advice, financial advice, or investment advice of any kind.

Nothing in this guide is intended to create, and receipt of it does not constitute, an attorney-client relationship, advisory relationship, or any other form of professional engagement between the author and the reader. The content reflects a general overview and may not address specific facts, circumstances, or applicable laws relevant to any particular situation.

Readers should not act or refrain from acting based on any information contained herein without seeking independent advice from qualified legal, tax, and financial professionals licensed in the relevant jurisdictions.

This document does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase, sell, or otherwise trade any securities, financial instruments, or assets. Any references to investment structures, jurisdictions, or regulatory regimes are illustrative only and should not be interpreted as endorsements or recommendations.

The author makes no representations or warranties, express or implied, regarding the accuracy, completeness, or timeliness of the information contained herein. Laws, regulations, and policies may change, and their application can vary widely based on specific circumstances.

To the fullest extent permitted by law, the author disclaim any liability for any loss or damage arising directly or indirectly from reliance on this document or its contents.

REFERENCES LIST

^[1] Art. 4, RÉGIMEN DE INCENTIVO PARA GRANDES INVERSIONES EN NUEVAS INDUSTRIAS (“Súper RIGI”), https://www.parlamentario.com/wp-content/uploads/2026/05/0005-PE-2026.pdf.

^[2] Martin Oliver, Argentina’s Super RIGI: Eight Energy and Mining Sectors in Scope, Formal Text Still Pending, Shale24, https://www.shale24.com/en/oil-and-gas/argentinas-super-rigi-eight-energy-and-mining-sectors-in-scope-formal-text-still-pending-n1147.

^[3] Art. 4, supra note 1, (Final Paragraph).

^[4] Art. 1, Id.

^[5] Art. 8, Id.

^[6] Art. 5, Id.

^[7] Art. 6, Id.

^[8] Art. 7 (a), Id.

^[9] Art. 7 (b), Id.

^[10] Art. 7 (c), Id.

^[11] Art. 7 (d), Id.

^[12] Art. 8 (a), Id.

^[13] Art. 8 (b), Id.

^[14] Art. 8 (e), Id.

^[15] Art. 12 (a), Id.

^[16] Art. 14, Id.

^[17] Art. 12 (b), Id.

^[18] Art. 13, Id.

^[19] Art. 22, Id.

^[20] Art. 24, Id.

^[21] Art. 15, Id.

^[22] Art. 16, Id.

^[23] Art. 17, Id.

^[24] Art. 19, Id., (last paragraph).

^[25] Art. 29, Id.

^[26] Art. 33 Id. (may displace Art. 73 of Argentina’s Tax Law – N° 20628).

^[27] Contra, Art. 73, Ley de Impuesto a Las Ganancias, https://biblioteca.afip.gob.ar/dcp/LEY_C_020628_2019_12_05.

^[28] Art. 34, supra note 1.

^[29] Art. 35, Id.

^[30] Art. 36, Id.

^[31] Art. 37, Id.

^[32] Art. 51, Id.

^[33] Art. 38, Id.

^[34] See also, Art. 93, supra note 27.

^[35] Art. 39, supra note 1.

^[36] Art. 40, Id.

^[37] Art. 52, Id.

^[38] Art. 53, Id.

^[39] Art. 54, Id.

^[40] Art. 55, Id.

^[41] Art. 45, Id.

^[42] Cf., OECD, Global Anti-Base Erosion Model Rules (Pillar Two), https://www.oecd.org/en/topics/sub-issues/global-minimum-tax/global-anti-base-erosion-model-rules-pillar-two.html#rules.

^[43] 26 USC §951A, Tax Cuts and Jobs Act of 2017 (TCJA), https://uscode.house.gov/view.xhtml?req=granuleid:USC-2023-title26-section951A&num=0&edition=2023.

^[44] See also, Internal Revenue Service (IRS), Concepts of Global Intangible Low-Taxed Income Under IRC 951A, https://www.irs.gov/pub/fatca/int_practice_units/global_intangible_low_taxed_income.pdf.

^[45] Art. 60, supra note 1.

^[46] Art. 61, Id.

^[47] Art. 70, Id.

^[48] Art. 74, Id.

^[49] Art. 84 (a), Id.

^[50] Art. 83, Id.

^[51] Art. 84, Id.

^[52] Art. 85, Id.

^[53] Art. 86, Id.

^[54] Art. 108, Id.

^[55] Art. 109, Id.

^[56] Art. 110, Id.

^[57] Art. 112, Id.

^[58] Art. 8 (a), Id.

^[59] Ley 27401 de Responsabilidad Penal, https://www.argentina.gob.ar/normativa/nacional/ley-27401-296846/texto.

^[60] 15 USC 78dd-1, Foreign Corrupt Practices Act of 1977 (FCPA), https://uscode.house.gov/view.xhtml?req=(title:15%20section:78dd-1%20edition:prelim)%20OR%20(granuleid:USC-prelim-title15-section78dd-1)&f=treesort&edition=prelim&num=0&jumpTo=true.

^[61] Art. 42, supra note 1.

^[62] US Tax Statute (26 U.S.C. § 482), https://uscode.house.gov/view.xhtml?req=(title:26%20section:482%20edition:prelim).

^[63] 17 CFR 229.103, 17 CFR Part 229 — Standard Instructions for Filing Forms Under Securities Act of 1933, Securities Exchange Act of 1934 and Energy Policy and Conservation Act of 1975 — Regulation S-K., https://www.ecfr.gov/current/title-17/section-229.103.

^[64] 17 CFR 229.105, 17 CFR Part 229 — Standard Instructions for Filing Forms Under Securities Act of 1933, Securities Exchange Act of 1934 and Energy Policy and Conservation Act of 1975 — Regulation S-K., https://www.ecfr.gov/current/title-17/section-229.105.

^[65] Art. 61, supra note 1.

^[66] Art. 62, Id.

^[67] Art. 66, Id.

^[68] Advisor to the President Santiago Luis Caputo. Not to be confused with his cousin, Minister of Economy Luis Caputo.

In this Special Interest Note | May 11th, 2026

The Trump-Lula summit on Thursday, May 7th, 2026 ended with little visibility into what topics were discussed by the two leaders and what they actually agreed to, if anything.

On trade, the USTR’s investigation remains open as a pressure instrument against Brazil rather than a targeted enforcement action, with the summit producing no visible movement in either direction. On critical minerals, a U.S.-backed company is acquiring Brazil’s only fully operational rare earths producer, but the deal is pending regulatory clearance on both sides. On strategic alignment, Brazil’s executive branch suspended the TECON 10 tender process at the Port of Santos under geopolitical pressure, leaving Washington’s objective of containing China and Brasília’s fiscal need for foreign infrastructure capital both unresolved.

The lack of information after the summit, and the otherwise reserved statements since, suggests that at best, not much of substance was actually agreed on.

Following this, we chose to narrow this brief to a limited number of topics that, while not exhaustive, will remain the most important for both administrations moving forward. These are:

• Trade Frictions & USTR Investigation;

• Critical Minerals; and

• China Exposure & Strategic Alignment.

This brief implements the ST Monitor’s classification to interpret specific developments across Latin America based on their phase of execution. Issues may remain at the level of (1) political signaling without an operational framework; (2) constrained within permission-based systems; or (3) fully operational and institutionalized. The cases chosen for this brief should be read through that lens:

• Level 1 — Pre-policy (no executable framework exists)

• Level 2 — Constrained execution (activity exists but is permission-bound)

• Level 3 — Execution Phase (system is operational and institutionalized)

Trade Policy | USTR Investigation into Brazilian Industrial Policies

Key Takeaways

• The summit produced no public evidence of movement on any item in the U.S.-Brazil trade relationship, with neither country conceding ground nor securing relief.

• The Section 301 investigation into Brazil is unusually broad, spanning digital payments, ethanol tariffs, deforestation enforcement, and anti-corruption interference, reflecting a pressure campaign across multiple negotiating fronts rather than conventional trade enforcement.

• PIX and ethanol are the two most immediately consequential items. Both involve sovereignty arguments, over domestic monetary infrastructure and agricultural trade policy, respectively, that both countries may find hard to concede bilaterally.

The Trump-Lula summit did not (publicly) resolve the fundamental disputes in the bilateral trade relationship between the U.S. and Brazil. The lack of concrete announcements after the talks does not offer any evidence that core issues such as tariffs, agricultural market barriers or investigations that could result in enforcement measures were resolved.

The U.S. government investigation into Brazil’s industrial policies and political practices remains open. In 2025, the U.S. Office of the Trade Representative (USTR) initiated an investigation into Brazil’s commercial and political practices. The investigation is anchored on Section 301 of the Trade Act of 1974 and it entitles USTR to find whether a certain practice by a foreign government is unreasonable or discriminatory in a way that burdens U.S. commerce.

This particular probe is unusually broad, spanning Brazil’s PIX digital payment platform, tariffs on U.S. ethanol, lax enforcement against deforestation, and anti-corruption interference, among other concerns. Normally, USTR pursues targeted trade complaints focused on one sector with a specific remedy in mind. However, what USTR has constructed against Brazil looks like a list of grievances designed to give Washington leverage across multiple negotiation fronts, not a conventional trade enforcement mechanism.

Hence, if the investigation was meant as leverage against Brazil during the summit, then the silence afterward may suggest that Washington did not use it to its favor. Nevertheless, this should not be read as an automatic win for Brazil, given that Lula did not successfully negotiate a way out of the investigation or obtain any tariff concession. At best, the status quo persists with no meaningful change or signal as to the future of the bilateral relationship.

In the short term, the investigation’s two most pressing items may be PIX and ethanol.

On PIX: The U.S. government sees PIX as a threat to the dominance of U.S. card payment networks. PIX is operated by Brazil’s Central Bank, which means challenging the regulatory prerogative of the bank over its domestic payment infrastructure. This is a sovereignty argument that Brazil may defend vehemently, as they may not see domestic monetary infrastructure policy as equivalent to trade measures. This item is unlikely to be resolved bilaterally.

On Ethanol: Ethanol remains one of the most politically charged issues in the bilateral relationship. Brazil currently maintains an 18% tariff on U.S. corn-based ethanol. This situation makes ethanol an easy political target for a Trump administration that prioritizes quick, visible wins with its agricultural base. Thus, ethanol is more likely to be used as a bargaining chip or retaliation point in the short term.

Overall, no enforcement action has been taken, even as the USTR investigation remains active and has a statutory process with defined timelines. With the summit producing no results, although the enforcement mechanism is real, the U.S. political will to activate it fully is unclear, keeping the investigation in a pre-policy state in practice.

Status: Level 1 — Pre-policy.

Critical Minerals | The Serra Verde Acquisition and U.S. interest in Brazil’s Critical Minerals

Key Takeaways

• USA Rare Earths’ $2.8 billion acquisition of Serra Verde is a U.S.-government-backed vertical integration play covering all four critical magnetic rare earth elements, from Brazilian mine to Oklahoma magnet plant.

• The deal is commercially operational at the asset level but remains pending HSR antitrust clearance in the U.S. and mining concession review by Brazil’s ANM.

• A live constitutional challenge before Brazil’s Supreme Court questions whether the State of Goiás has the authority to support mining concessions.

• U.S. tariffs on Brazil create friction in the same bilateral relationship Washington needs for supply chain integration, and the summit produced no signal that this contradiction was addressed.

The U.S. government has a strategic interest in Brazilian mineral rights. On April 20, 2026, USA Rare Earths, Inc. (USAR) acquired Brazilian rare earths mining company Serra Verde for $2.8 billion. The deal is expected to close in Q3 of 2026, pending antitrust (HSR) clearances from the Federal Trade Commission (FTC) and the Department of Justice (DOJ) on the U.S. side, and from Brazil’s mining regulatory body (ANM), which has control over mining concessions.

USAR is directly backed by the U.S. government through a $1.6 billion funding agreement, aimed at securing sovereign, stable access to rare earths and critical minerals needed for defense and semiconductor manufacturing. At the upstream level, Serra Verde’s Pela Ema operation in Goiás, Brazil mines all four critical magnetic minerals (Neodymium, Praseodymium, Dysprosium, and Terbium). At the midstream level, Serra Verde processes the minerals in its plant on-site. Production is fully operational.

Thus, the acquisition of Serra Verde makes USAR a vertically integrated company, as USAR provides downstream capacity through their NdFeB magnet manufacturing plant in Stillwater, Oklahoma. Consequently, the Serra Verde deal is now a matter of supply chain security for the U.S. government, given its focus on the AI race and strategic competition with China.

However, U.S. tariffs on Brazil complicate Washington’s strategic objectives in Brazilian mining. The U.S. cannot simultaneously pressure Brazil commercially and expect frictionless cooperation on critical minerals supply chain integration. After all, the resources are located in Brazil and they are thus susceptible to both the U.S. tariff regime and to the Brazilian government’s jurisdiction.

Furthermore, Brazilian politics seem split on the matter, with state-side showing support for the deal, and a coalition of interests at the federal level opposing the deal. Specifically, the State of Goiás is being challenged, on constitutional grounds, over its limited capacity to decide over mining concessions, which the claim argues is a federal, not state, prerogative. The matter is on the docket of the Supreme Court of Brazil (STF.)

The Trump-Lula summit may have provided an opportunity to settle the matter in favor of the U.S., while providing at least some tariff concessions for Brazil. Nevertheless, the opacity of both administrations’ post-summit statements do not provide enough information to conclude there was indeed any progress made on this front.

Taken together, the question that remains unanswered is whether a critical minerals producer in a tariffed, non-allied country can complete the transition to integrate into the American supply chain in a manner that satisfies the U.S. government interests and is not perceived as a threat to the host country’s sovereignty.

Absent future statements from either administration, the Serra Verde deal and its ramifications for both countries may remain constrained by legal and political circumstances, even when the business side is operational.

Status: Level 2 — Constrained execution.

Strategic Alignment | TECON 10, the Port of Santos, and China Exposure

Key Takeaways

• Brazil’s executive branch involved itself in the suspension of the TECON 10 tender process, reflecting the geopolitical weight of the concession rather than a procedural dispute.

• China already holds a 25-year lease on TECON 11, the adjacent grains terminal. A Chinese operator winning TECON 10 would extend that footprint at the largest port in the Southern Hemisphere.

• Washington’s position is ambiguous: no preferred winner, only a prohibited one, offering Brazil no political cover for blocking Chinese participation.

Brazil’s Casa Civil (Presidential Chief of Staff’s Office) recently suspended the TECON 10 tender, escalating the battle over the mega terminal in the Port of Santos to the executive level. This issue involves the U.S. government, insofar as it has made explicit efforts to discourage Brazilian port executives from allowing China to win the tender.

The dispute around TECON 10 is two-fold: it ultimately centers on (1) who captures the margin on Brazil’s agricultural exports, and (2) whether China can wean itself off from U.S. soy through control of the Brazilian soy market.

From a geopolitical standpoint, the U.S. government has not expressed a preference for any one company to win the Santos mega terminal tender. Where the winner of the tender is incorporated does not seem to matter to Washington, so long as it is not a Chinese company. The U.S. government’s concern seems to be China’s rapid diversification away from the U.S. soy market and Beijing’s increasing grip over Brazilian key trade infrastructure and penetration of its soybean sector.

Brazil’s Ministry of Ports and Airports (MPor) had ordered the immediate suspension of the TECON 10 leasing process at the Port of Santos, in late April. The instrument, signed by National Ports Secretary Alex Ávila, instructs ANTAQ (Brazil’s port authority) to halt its analysis and return the file to the Ministry for reassessment. No new date exists for the publication of the notice to bidders or the auction itself.

The backdrop is not neutral. China already holds a 25-year lease over TECON 11, an expanding grains terminal adjacent to the proposed site. TECON 10 itself is designed as a container terminal, not a bulk grains facility, but that distinction is of no consequence: containerized agricultural flows originating in Brazil can still move through it, alongside inbound Chinese manufactured goods.

Brazil’s public debt-to-GDP ratio stood at 93.3% in 2025, while over 90% of federal spending is mandatory, leaving the PT (or any successor) with no room to maneuver. Infrastructure concessions are one of the few levers available that do not require mandatory spending. Thus, delaying or cancelling the TECON 10 tender is not a neutral act in this fiscal environment—especially in 2026, an election year in Brazil.

TECON 10 is where a particular macroeconomic tension is becoming visible. Brazil simultaneously needs foreign capital to build port infrastructure it cannot fund publicly, and protection of its agricultural margin from the same foreign capital once it controls the infrastructure. Those two needs are on a collision course and it’s now clear that the Brazilian government does not have a clean answer to it.

The Trump-Lula summit has not provided any leads on the matter so far. Likewise, neither Brazilian politics nor the U.S. diplomatic corps in Brazil have touched on the subject (publicly) since late April.

It is not clear from either Washington or Brasília that they are satisfied with the present situation. Washington desires to cap Chinese access and influence over Brazilian markets and trade infrastructure, and Brasília desires the benefits of FDI without the economic and political dependence. In the short term, TECON 10 may remain a stalled issue due to a combination of geopolitical, legal, and economic pressures, absent signals from the Brazilian government to the contrary.

Status: Level 2 — Constrained execution.

Other Relevant Context to the Post Trump-Lula Summit Scenario:

Brazil’s Political Landscape

Lula approached the May 7 White House meeting seeking a visible, positive diplomatic achievement, given his fragile political position at home. Brazil’s 2026 presidential race has become highly polarized, with recent polling showing opposition figure Flávio Bolsonaro in a statistical tie with Lula in a potential runoff.

Lula’s political vulnerability is clearest in the Senate’s rejection of one of his Supreme Court nominees, the first such failure since 1894.

However, Lula continues to dominate the Workers’ Party (PT), relying on strong support from labor unions, academia, and progressive Catholic groups, while opposition parties still struggle to match the PT’s organizational machinery. Veteran PT strategist José Dirceu has also re-emerged publicly, signaling an effort to rebuild influence despite his past corruption convictions and history as a leftist militant.

On the right, conservative governor Ronaldo Caiado has gained visibility as a potential alternative, representing a traditional, conservative strand linked to agribusiness, property rights, and the economic expansion of Brazil’s Center-West region.

Watch for: Lula may need a visible win or concession from the U.S. in the short term to project strength, stabilize his base, and improve his standing ahead of a difficult 2026 re-election campaign in an increasingly competitive environment.

Meatpacking Giant JBS comes under U.S. DOJ Scrutiny

JBS, Brazil’s meatpacking giant and historically one of the country’s largest corporate campaign donors, is facing a new U.S. Department of Justice investigation into price-fixing and anti-competitive conduct, alongside other firms including fellow Brazilian company Marfrig.

The group is also one of the most exposed to Trump’s tariffs on Brazilian beef. In parallel, JBS’s holding company J&F has recently announced investments in missile manufacturing (via Avibras) and a major potash project in Brazil.

Watch for: JBS has both a strong incentive and considerable political influence to lobby for tariff relief and improved U.S. relations. Its interests add a significant sector-specific dimension to the post-summit scenario, as the company seeks to protect and expand its critical U.S. market access while managing legal and reputational risks on both countries.

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This article is a collaboration between Manuel Reyes and Luis Vieira.

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In this Edition | April 2026

Energy developments in the past few weeks in Latin America show plans or operations with varying degrees of execution and state regulatory authority. Factors influencing the energy sector in the region include local political will, geopolitical and international sanctions pressure, and industrial policy priorities.

In Mexico, political intent to frack the Sabinas-Burgos basin has not yet translated into a federal framework ripe for implementation. In Venezuela, oil sector activity is re-emerging but remains tightly controlled through external OFAC licensing. In Brazil, a re-scaling and procurement re-design of the country’s grid system is already operational, with institutional mechanisms shaping investment and reliability.

The focus is not resource potential, but the degree to which that potential has been or may be converted into value-generating activities.

This edition of the ST Monitor introduces a simple classification to interpret specific energy developments across Latin America based on their phase of execution. Some plans remain at the level of (1) political signaling without an operational framework; others are (2) constrained within permission-based systems; and others are (3) fully operational and institutionalized. The cases chosen for this edition in Mexico, Venezuela, and Brazil should be read through that lens:

• Level 1 — Pre-policy (no executable framework exists)

• Level 2 — Constrained execution (activity exists but is permission-bound)

• Level 3 — Execution Phase (system is operational and institutionalized)

Mexico | Shale Gas | Fracking in Coahuila remains rhetorical, no policy plan in sight

Key takeaways

• “Gas Coahuila” is a political positioning initiative by Coahuila Governor Manolo Jiménez, not a formal policy or program at the federal level.

• The concept reflects a regional economic pivot toward shale gas in the Sabinas-Burgos basin, driven by the collapse of the AHMSA steel corporation, but lacks federal regulatory backing.

• Upstream hydrocarbon activity in Mexico requires federal authorization through SENER, CNH, or CRE, with alignment to the Hydrocarbons Law. Thus, Governor Jiménez has no authority over mineral rights or upstream licensing.

• The AHMSA bankruptcy asset sale was formally launched but collapsed at its first auction; the process is now in a second iteration.

• Both developments signal strategic intent without execution, pointing to a pre-policy phase rather than an active market opportunity.

What political and business figures in northern Mexico are calling “Gas Coahuila” does not exist as a formal policy instrument in primary records. The name belongs to an initiative of Coahuila Governor Manolo Jiménez, and its most prominent public articulation was at the XVI Plenary Session of the Asociación de Ciudades Capitales de México (ACCM) in February 2026, where it was presented as political messaging rather than codified policy.

There is no decree, program registration, regulatory filing, or federal initiative under that name. In Mexico’s energy system, upstream hydrocarbon activity requires federal backing, along with alignment to the Hydrocarbons Law and relevant permitting and budgetary mechanisms. Coahuila’s governor is actively marketing shale development to U.S. energy firms, particularly in Texas, positioning the state as a future production hub. However, this outreach occurs within a constitutional framework where mineral rights and upstream authorization remain exclusively federal. Therefore, state-level promotion should be understood as a prospective plan, not a formally proposed program.

The underlying structural logic holds, nonetheless. Coahuila sits atop the Sabinas-Burgos basin (343 Tcf), one of Mexico’s key shale gas regions. Any effort to replace the industrial decline left by the collapse of steel giant Altos Hornos de México (AHMSA) — which ceased operations in 2022 and was formally declared bankrupt in 2024 — would point toward hydrocarbons development. “Gas Coahuila” is, in that sense, an attempt to reposition the state economically around gas extraction and related industrial activity.

At the federal level, the Coahuila plan intersects with a broader but still incomplete shift by the Sheinbaum administration toward reconsidering unconventional gas development. Without explicit regulatory changes, licensing rounds, or investment frameworks, however, no executable pathway is yet visible.

The AHMSA bankruptcy is similarly unresolved. A first auction round collapsed last February when the court declared it void after the sole qualified bidder failed to post its seriousness guarantee and secured creditors withheld consent for the integral sale. The company remains within Mexico’s commercial bankruptcy proceedings, and the case trustee has since submitted a revised sale proposal for judicial review, entering a second iteration of the process.

Together, both threads point to the same conclusion: Coahuila is pushing for a strategic reframing of its industrial base, but that reframing has not yet translated into formal policy instruments or market-accessible processes. The result is political positioning ahead of regulatory and legal action.

Status: Level 1 — Pre-policy

Venezuela | Oil Sector | OFAC, IMF Move to Normalize Economic Relations with Venezuela under Delcy Rodriguez

Key takeaways

• The U.S. is not lifting Venezuela sanctions broadly, but building a layered licensing system through OFAC that selectively permits activity in oil and finance.

• Oil licenses reopen trade in existing crude flows, while financial licenses restore limited payment and settlement channels needed to support that trade.

• The framework enables a closed-loop system: physical oil flows can restart, but only within tightly controlled financial and legal pathways.

• Investment, production expansion, and full financial normalization remain explicitly prohibited, keeping Venezuela structurally constrained despite partial reopening.

• The IMF will resume “dealings” with Venezuela and technical coordination, signaling early-stage multilateral normalization alongside the sanctions easing.

The U.S. continues selective easing of sanctions on Venezuela through specific OFAC licenses that separate physical oil trade from financial channels supporting it. Washington is building a layered “permit system” for limited re-engagement with Venezuela’s hydrocarbons sector.

On the oil side, General Licenses 46/46B and 50A authorize defined commercial activities involving Venezuelan-origin crude and gas. These include lifting, transport, marketing, refining, and related services, allowing crude to re-enter international circulation under strict compliance rules. However, these licenses explicitly exclude upstream investment, production expansion, and new field development, meaning the framework enables trade in existing output but does not restore investment control or full operational autonomy.

On the financial side, General Licenses 56 and 57 extend this controlled opening by authorizing transactions involving the Central Bank of Venezuela (BCV) and other state financial institutions. The licenses reopen limited payment processing, settlement activity, and financial intermediation that had remained blocked even after oil-sector easing. Jointly, these licenses begin to reconstruct the financial conduit for oil trade, but only within a tightly monitored perimeter.

Taken together, the structure effectively creates a closed-loop: oil licenses reactivate physical crude flows, while financial licenses partially restore settlement channels. The result is not sanctions relief in the traditional sense, but a controlled exposure regime in which engagement is possible only through narrowly defined legal pathways.

From a governance and compliance perspective, this shifts the operating model for companies from a binary “allowed vs. prohibited” framework to a granular, transaction-by-transaction licensing system. Legal exposure is no longer determined primarily by market entry, but by routing, counterparties, and compliance with evolving license conditions across a multi-step chain of transactions.

From a financial crime and corruption risk perspective, the reintroduction of BCV-linked channels brings sovereign-controlled settlement infrastructure back into play. This increases exposure to opaque flows, indirect counterparties, and multi-jurisdictional routing through state and quasi-state entities. Even when compliant with OFAC rules, the structure raises AML complexity due to layering risk and reduced transparency in settlement chains.

Parallel to this sanctions’ evolution, the IMF announced a resumption of “dealings” with Venezuela, according to Managing Director Kristalina Georgieva. Early steps include technical engagement and data coordination with Venezuelan authorities. This signals that the international community is getting ready to normalize economic relations with Venezuela under Delcy Rodríguez.

Overall, Venezuela is being gradually (but quickly) reintroduced into the global financial and commodity systems through layered permissions and toward full normalization. That is, the system is opening selectively, with oil, finance, and institutions all reconnected through controlled, reversible channels rather than full reintegration.

My earlier coverage has repeatedly insisted that “uninvestable” was never a technical or financial assessment of the Venezuelan oil sector, but a negotiating position by U.S. oil companies.

Status: Level 2 — Constrained execution

Brazil | Electric Power Sector | Brazil Restructures Electricity Reliability Through 2026 Tender Process

Key takeaways

• Brazil is shifting from paying for electricity generation to paying for guaranteed power availability (capacity).

• The 2026 LRCAP contracted roughly 19 GW of firm capacity across multiple technologies through 2031.

• Competitive bidding significantly reduced costs, with savings potentially reaching billions of reais.

• The system prioritizes reliability and flexibility to manage rising demand and renewable intermittency.

• The auction strengthens long-term investment certainty for energy companies while reshaping Brazil’s electricity market design.

Brazil is restructuring its grid reliability and procurement system by contracting “capacity” rather than just energy produced. The 2026 “Tender for Reserved Capacity in the form of Power” (LRCAP) coordinated auctions to secure reliable dispatchable power for the Brazilian grid under peak demand and variability conditions.

The Brazilian grid is no longer planned purely on megawatt-hours generated over time. Instead, it now prioritizes the degree to which available power can be called upon when needed. The National Electric System Operator (ONS), the Energy Research Office (EPE), and the National Electric Energy Agency (ANEEL) jointly designed and executed the tender, with the Ministry of Mines and Energy (MME) setting the regulatory framework. Their technical notes defined the modeling assumptions:

• transmission constraints;

• system reliability needs; and

• “remaining capacity” available for new generation connections.

These technical layers determined which projects could compete in the auction and at what scale.

The 2026 LRCAP covered different technology groups, including gas, coal, hydro, and liquid-fuel sources such as oil and biodiesel. This separation reflects Brazil’s balance between cost, flexibility, and fuel security. Baseload capacity is secured with gas, coal, and hydro at lower cost, while oil and biodiesel units are retained at higher cost for peak demand or system stress conditions.

The system contracted about 19 gigawatts (GW) in the main LRCAP cycle. Eneva and Petrobras emerged as major winners. Competitive bidding produced discounts (avg. 5.52%) relative to reference prices, generating estimated savings in the billions of reais over contract lifetimes. Companies competed aggressively for long-term guaranteed revenue streams, which pushed prices down while still ensuring sufficient capacity for the grid.

Contract design evolution was also central to the process, not just total capacity volume. Earlier Brazilian energy auctions focused on electricity produced, but the 2026 LRCAP shifted toward capacity payments, meaning generators are paid for availability rather than only energy generated.

Corporate and market reactions reflect the importance of this auction for investment planning. Large state-owned and private energy companies use these auctions to secure long-term cash flow stability. Winning capacity contracts helps justify major capital investments in new thermal plants and fuel infrastructure.

Finally, the broader implication is that Brazil is strengthening system reliability through diversification of energy sources. The scale of the auction also signals expectations of rising electricity demand and greater renewable intermittency, requiring additional firm capacity.

In summary, the 2026 LRCAP cycle is best understood as a coordinated national capacity procurement program, not just a single auction result. It contracted roughly 19 GW of firm power across multiple technologies, shifted toward a capacity-based market structure, generated cost savings through competition, and strengthened reliability by ensuring flexible thermal and hydro resources remain available to stabilize a rapidly evolving grid.

Status: Level 3 — Execution Phase

Other Energy-related News to Observe:

• Oil & Gas | Mexico: PEMEX is experiencing financial pressures due to the federal government’s limited capacity to invest in it.

  • Watch for: Federal support mechanisms (e.g., capital injections, debt restructuring). Any shift may signal to what extent the Mexican government is prepared to stabilize PEMEX.

• Shale | Mexico: Sheinbaum signals further moves for shale gas. A scientific committee will evaluate eco-friendlier shale gas extraction technologies. The committee will deliver recommendations within two months.

  • Watch for: The report is not important, better shale gas extraction techniques have been around for years. What’s important is Sheinbaum’s tolerance for the Iran war’s negative effects on the Mexican economy vis-a-vis the 2027 midterm elections.

• Shale | Argentina: Vaca Muerta will require at least $114 billion in investment over the next 10 years to sustain its current pace of development.

  • Watch for: Midstream capacity bottlenecks. If the terminal at Punta Colorada and the pipeline system stemming from the Neuquén basin deliver volume as projected, capital input won’t be an issue.

• Organized Crime | Peru: A new form of criminal activity has emerged in Perú, after a convoy transporting 10.5K bbl of oil was detained by non-state actors on the Trompeteros River. The group is demanding S/2 million for safe passage.

  • Watch for: Replication of this tactic across oil transport routes. Government tolerance would likely lead to rising operating risk and potential cost pressures for inland logistics.

• Geopolitics | Panama Canal: China is pressuring Maersk to abandon activities at the Balboa and Cristobal port terminals in the Panama Canal, following its takeover of CK Hutchison’s operations. China’s NDRC (regulatory body) has reportedly threatened Maersk directly, citing national security grounds.

  • Watch for: Formal NDRC rule-making against Maersk. If carriers start hedging against instability in the Panama Canal, freight rate volatility may feed into bunker price behavior.

ST Monitor | April, 2026

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Energy Sector Developments in Latin America | Focus: Mexico Shale Gas, Venezuela Oil Licenses, Brazil Power Markets

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Resumen Ejecutivo — Publicado originalmente en Abril, 2026.

• Un nuevo mecanismo neo-colonial está emergiendo en Brasil. La creciente concentración de infraestructura y del comercio de la soya en manos chinas está cambiando el equilibrio competitivo del mercado brasileño de granos.

• Tras el fracaso diplomático de la estrategia de adquisición de tierras en el exterior, China giró hacia un modelo más sofisticado: controlar la cadena de valor agrícola —insumos, originación, logística e infraestructura portuaria— en lugar de poseer la tierra. Brasil, con el 41,5% del mercado mundial de soya, es el eje de esa estrategia.

• La arquitectura de control chino opera en tres capas simultáneas:

  (1) upstream, a través de COFCO —que adquirió Noble Agri y Nidera entre 2014 y 2017, comprando un siglo de relaciones comerciales con productores del Cono Sur— y de ChemChina/Syngenta, que opera la IP de la variedad de soya NA 5909 RG de Nidera y la vende de vuelta al agricultor brasileño; (2) midstream, manteniendo cientos de vagones de carga y decenas de locomotoras en propiedad de COFCO, más la concesión a 25 años de la Terminal 11 en Santos y el 90% del puerto de Paranaguá en manos de CMPort como salidas atlánticas, y (3) downstream, con la capacidad a futuro de influir los mecanismos de formación de precios debido a su creciente condición monopsónica en el mercado brasileño de granos.

• El mecanismo de extracción no requiere manipulación de precios ni coerción: opera a través de la captura de renta ricardiana vía captura de rentas de infraestructura.

• El productor brasileño recibe el precio de mercado, pero ese precio de mercado se fija de cara a compradores cuya estructura de costos logísticos es más alta que la de COFCO.

• Los márgenes de beneficio que deberían fluir al productor se quedan en manos del operador chino, integrado verticalmente. El resultado: la ventaja competitiva agrícola que Brasil construyó durante 50 años de política pública termina subsidiando la seguridad alimentaria china a través de condiciones comerciales asimétricas.

El artículo examina cómo China ha transformado el comercio de soya brasileña en un instrumento estratégico de su propia seguridad alimentaria. A través de inversiones directas, control de puertos y poder de mercado, Pekín ha estructurado el flujo comercial de manera que Brasil asume gran parte de los costos y riesgos, mientras China obtiene suministro estable y condiciones ventajosas.

Se documenta cómo esta dinámica genera una dependencia asimétrica: los productores brasileños enfrentan mayor volatilidad de precios y presión logística, mientras China asegura su cadena de suministros con relativa estabilidad.

En conclusión, Brasil está pagando un precio oculto por su rol de gran proveedor de soya a China. La “seguridad alimentaria con características chinas” se construye, en parte, sobre la base de condiciones comerciales que comprometen la autonomía y la rentabilidad a largo plazo de la agroindustria brasileña.

Este breve resumen se ofrece como cortesía al público hispanohablante y no constituye la versión completa del artículo principal en Inglés, publicado originalmente en Abril 10, 2026.

El artículo original “Food Security with Chinese Characteristics, or How to Make Brazil Pay for Your Soy” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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Resumen Ejecutivo — Publicado originalmente en Marzo, 2026.

• El Activismo inversor contra Chubb —liderado por la coalición As You Sow y Green Century desde 2019— demandó a la compañía en un tribunal federal de D.C. sobre una propuesta a incluirse en la junta de accionistas de este año.

• Independiente de la demanda, el motivo de fondo busca un resultado más ambicioso que controlar emisiones de gases de efecto invernadero: se busca forzar al mayor asegurador P&C del mundo a demandar judicialmente a la industria de combustibles fósiles por daños climáticos vía subrogación.

• Si la demanda prospera y Chubb es forzado, a su vez, a demandar a la industria petrolera, los efectos no se limitarían al sector solamente: cualquier industria que dependa de actividades relacionadas a, o que se garanticen con hidrocarburos o sus derivados —logística, agro, infraestructura— quedaría expuesta a interrupciones severas en el acceso a esquemas de re-aseguramiento a escala global.

• La industria de los seguros es la llave maestra de la economía industrial moderna: sin ella no hay financiamiento de proyectos, no hay crédito bancario y no hay operación comercial a escala.

• Chubb es el mayor cedente en México por volumen de primas, con una posición dominante en líneas industriales —refinería, transporte, riesgo catastrófico— que ningún asegurador local tiene capacidad de absorber. Su salida del país o su restricción operativa no “elimina” a un actor, sino que impide el acceso al sistema global de re-aseguramiento.

• El verdadero costo de esta batalla legal se pagará en el Sur Global, no en los juzgados de Washington. México, con su infraestructura energética y logística dependiente de combustibles fósiles, enfrenta costos crecientes y posibles brechas de asegurabilidad.

• Estos cambios generarían presiones en cadenas de suministro (transporte refrigerado, almacenamiento y distribución de alimentos) y redistribuirían riesgos hacia productores y consumidores finales.

El artículo analiza cómo un endurecimiento de las políticas de aseguramiento de riesgos de Chubb (con base en criterios anti-hidrocarburos) y otras aseguradoras internacionales pueden generar costos tangibles para productores de alimentos e infraestructura comercial en México.

Utilizando al país azteca como estudio de caso, se muestra que estas decisiones desde ámbitos transnacionales trasladan presión financiera hacia sectores clave como energía, transporte y logística.

Un endurecimiento de los criterios de aseguramiento anti-hidrocarburos no solo aumentaría las primas, sino que en algunos casos reduciría o eliminaría la cobertura disponible para activos de tipo industrial, y que dependen de la economía diesel. Esto daría al traste con la viabilidad económica y la estabilidad de cadenas de suministro que incluyen, por ejemplo, la producción y distribución de alimentos.

En última instancia, las decisiones de aseguradoras globales como Chubb tienen un impacto directo y a menudo subestimado en economías emergentes. Estos costos no se quedan en el Norte; se trasladan hacia el Sur, afectando la competitividad y la seguridad alimentaria y energética de países como México.

Este breve resumen se ofrece como cortesía al público hispanohablante y no constituye la versión completa del artículo principal en Inglés, publicado originalmente en Marzo 18, 2026.

El artículo original “Chubb’s Climate Insurance Wars Have a Price: Ask Mexico” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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© 2026 Manuel Reyes, The Southern Trade Group™. All rights reserved. Content may not be reproduced without permission.

Resume Ejecutivo — Publicado originalmente en Febrero, 2026

• La interferencia política de la administración Petro en Ecopetrol ha desmantelado de facto la independencia de la junta directiva: 17 ejecutivos han renunciado o sido destituidos desde 2022,

• El ingreso neto de la empresa cayó de $7,85 mil millones en 2022 a $3,6 mil millones en 2024, y las reservas probadas descendieron un 3,3% neto en el mismo período. La moratoria sobre la actividad exploratoria implica que las reservas actuales se agotarán hacia 2030.

• El caso emblemático que resume la mala gestión fue el rechazo a ampliar la participación de Ecopetrol en el Proyecto Crownrock en la Cuenca Pérmica en Texas, EE.UU., uno de los activos más rentables de la empresa.

• Además, la posible venta total de la posición en la Cuenca Pérmica ilustra cómo las prioridades políticas de Petro están anulando los deberes fiduciarios de la junta hacia los accionistas, incluido inversores internacionales.

• El contraste con Petrobras y YPF —empresas estatales de Brasil y Argentina que mantienen autonomía operativa con independencia del color político del gobierno— demuestra que la gobernanza corporativa no es ideológica sino funcional.

• Ecopetrol aporta hasta el 10% de los ingresos del Estado. El costo de su deterioro institucional se trasladará a la capacidad fiscal para dar servicios públicos en un país con altas tasas de pobreza y 7,3 millones de desplazados internos.

El artículo documenta de forma detallada cómo el gobierno de Gustavo Petro ha desmantelado progresivamente los mecanismos de gobernanza corporativa de Ecopetrol y la posición de su CEO, Ricardo Roa en la compañía, como aliado de Petro.

A través de nombramientos políticos, purgas en la junta directiva y decisiones estratégicas controvertidas, se ha priorizado la agenda ideológica del gobierno sobre la maximización de valor para los accionistas minoritarios y la sostenibilidad operativa de la empresa.

Se presenta evidencia cuantitativa clara: caída de ingresos netos, reducción de reservas probadas y un reemplazo de producción insuficiente. Estas tendencias no son accidentales, sino el resultado directo de la intervención política en las decisiones operativas y estratégicas de la compañía.

Se advierte que la erosión de la gobernanza corporativa en Ecopetrol representa un riesgo sistémico para Colombia. Al tratar a la empresa como un instrumento de política pública en lugar de una entidad comercial, el gobierno está comprometiendo su valor a largo plazo y, por extensión, los recursos fiscales del Estado.

Este breve resumen se ofrece como cortesía al público hispanohablante y no constituye la versión completa del artículo principal en Inglés, publicado originalmente en Febrero 28, 2026.

El artículo original “Gustavo Petro and the Abolition of Corporate Governance in Ecopetrol” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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Resumen Ejecutivo — Publicado originalmente en Febrero, 2026

• El embargo petrolero de la administración Trump no es la causa del colapso cubano: es un acelerador de una crisis estructural de décadas provocada por la gestión centralizada del Estado.

• Cuba produce aproximadamente 41.000 bpd, cubriendo solo el 40% de su demanda interna; los apagones de más de 1.600 MW de déficit en horas pico y la contracción acumulada del 15% del PIB desde 2018 anteceden al decreto ejecutivo de enero de 2026.

• La economía cubana funciona en la práctica como un sistema de subsidio forzado por la diáspora: el salario promedio equivale a ~13 USD al mes y la pensión de jubilación a ~4 USD. Los emigrados absorben costos de sustento familiar que el Estado no puede o no quiere cubrir, logrando que el modelo político persista sin reformas de fondo a los controles estatales sobre el sector privado.

• La fragilidad económica del país —transporte paralizado, servicios públicos colapsados, turismo en mínimos históricos de 1,8 millones de visitantes— otorga a Washington ventajas reales de negociación.

• Sin embargo, ninguna presión externa resuelve las decisiones internas que mantienen al Estado como único actor económico por mandato constitucional.

Este artículo se reporta desde Cuba, y combina la observación en primera persona con datos oficiales para demostrar que, aunque el embargo estadounidense intensifica las dificultades, la raíz de la crisis económica cubana es interna.

El gobierno cubano mantiene un modelo centralizado que prioriza el control político sobre la productividad, generando décadas de estancamiento. Se subraya que sin reformas estructurales profundas, cualquier alivio externo solo pospondría el colapso inevitable.

Este breve resumen se ofrece como cortesía al público hispanohablante y no constituye la versión completa del artículo principal en Inglés, publicado originalmente en Febrero 13, 2026.

El artículo original “U.S. Oil Embargo Forces a Reckoning with Cuba’s Economic Collapse” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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Resumen Ejecutivo — Publicado originalmente en Enero, 2026

• Las reservas de petróleo venezolano se componen mayoritariamente de crudos pesados y de alta acidez, pero eso no los hace inviables: las refinerías de EE.UU. llevan décadas adaptadas para procesar crudo pesado y obtener diésel, asfalto, ceras, lubricantes y combustibles industriales (HFO).

• El diferencial de precio frente al Brent o el West Texas Intermediate (WTI) no elimina el margen de ganancia; analistas estiman un breakeven de entre $30–40/barril si se eleva la producción a 1 millón de barriles diarios.

• El término “uninvestable” (no apto para invertir) utilizado por el CEO de ExxonMobil no refleja un juicio técnico ni financiero sobre Venezuela: es una posición negociadora.

• Las empresas petroleras temen repetir la doble expropiación que sufrieron (1976 y 2007) y exigen garantías legales robustas antes de comprometer capital, especialmente dada la obligación legal de asociarse con PDVSA, una entidad con serios problemas de compliance bajo la Ley FCPA de EE.UU.

• El control estadounidense sobre el crudo venezolano —el país con las mayores reservas del Grupo OPEP+— pudiera darle a Washington una palanca inédita para erosionar la capacidad del cartel petrolero de sostener precios artificialmente altos.

• La historia indica que el gobierno de EE.UU. ha cedido ante las exigencias de las petroleras estadounidenses cuando hay intereses geopolíticos en juego. El acuerdo llegará; la pregunta es en qué términos.

En este artículo se desmonta la visión predominante de que Venezuela es un país “no apto para invertir” en materia petrolera. Se argumenta que los fundamentos técnicos y económicos siguen siendo sólidos —si bien los desafíos son reales— y que el petróleo venezolano sigue siendo competitivo en costos y compatible con la refinación estadounidense.

El verdadero freno no radica en la calidad del crudo ni en la geología, sino en la incertidumbre política y contractual. Con las garantías adecuadas, el sector podría recuperarse con relativa rapidez y generar ventajas estratégicas para Washington y Venezuela a largo plazo.

Este breve resumen se ofrece como cortesía al público hispanohablante y no constituye la versión completa del artículo principal en Inglés, publicado originalmente en Enero 22, 2026.

El artículo original “Why is Everyone so Down on Venezuelan Oil?” se encuentra disponible en Inglés en la página principal. Puede consultarse aquí:

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© 2026 Manuel Reyes, The Southern Trade Group™. All rights reserved. Content may not be reproduced without permission.

Key Takeaways:

• A new neocolonial pattern is emerging in Brazil. China captures value in Brazilian agribusiness not through land grabs or coercion, but through controlling inputs, trade, and infrastructure, subsidizing its own food security while leaving Brazilian sovereignty formally intact.

• Brazilian farmers experience margin compression under this model. Even though prices are market-driven, concentration of infrastructure and trade in Chinese hands shifts the competitive equilibrium, limiting the farmer’s own productivity gains.

• China may influence price discovery. Controlling infrastructure and origination may allow Chinese SOEs to affect market timing and conditions, ensuring Brazilian soy costs less to deliver to China than competitors, even without directly setting prices.

  

Last year, passions stirred when the Brazilian government modified the original tender offer of a mega terminal in the Port of Santos.^[1] The shipping industry and the political spheres were flustered, after Brazil’s Port Authority (ANTAQ) followed its own recommendation to sideline established port operators from the tender process.

Brazil almost surpassed the U.S. as an agricultural exporter in 2025. At $169.1 billion sold in agricommodities last year, Brazil’s rise as the next global breadbasket seems less a question of if and more a question of when.

The tender offer process keeps delaying, after Brazil’s auditing body (TCU), upheld ANTAQ’s decision. Last March, the U.S. Consul-general in Sao Paulo cautioned port executives against allowing China to clinch the concession of TECON 10, the mega terminal. The result of this battle may offer clues as to whether Brazil has a plan to capitalize on their agronomic progress, or if instead, they will revert back to being an agricultural neo-colony.

A global breadbasket in the making: Brazil’s ascent to the top of global agribusiness

In 1971, an obscure U.S. Department of Agriculture report noted that Brazil was an upstart agricultural nation, quickly rising through the ranks in export volumes. The main rationale behind it was that Brazil, like the U.S., could produce high-yield soybean crops, high in oil content, which would then go to the profitable crushing industry instead of table food alone.

At the time, only the United States and China produced more soybean than Brazil, respectively.

However, there were other powerful factors driving this agricultural development. The Brazilian government had an elaborate scheme of incentives and policies to wean itself off from food imports. These included R&D on seed strains, crop adaption to tropical areas in center-west Brazil, adopting floor prices for agricommodities, offering federal loans to farmers, compelling commercial banks to destine about 10% of their loans for agricultural production, and favoring the expansion of wheat crops. Wheat planting, specifically, reinforced another incentive scheme where Brazilian farmers entered a yearly, double-crop system of planting soybean immediately after harvesting the wheat.

Wheat, like corn, is a heavy feeder on nitrogen, so the soybean—a legume—was a perfect free nitrogen fertilizer and summer crop, following the winter wheat. The machinery for wheat crops, also, could be shared with the soybean crop, which in turn expanded mechanization, cooperatives, and storage capacity.

The report warned that Brazil’s soybean market was to be observed closely, as the South American nation could turn into a U.S. competitor, eventually.

This was over half a century ago—or 55 years, to be precise.

Today, Brazil dwarfs the rest of the world in soybean production. In 2025, Brazil produced over 166.1 million metric tons (MMT) of soybean, while the U.S. harvested 115.9 MMT, and China accounted for 20.91 MMT. The world combined yielded over 400 MMT.

Thus, Brazil is 41.5% of the global soybean market: They are the market.

As the world population continues to grow in the dozens of millions every year, food security is an increasing concern for governments around the world. Among the most concerned: The People’s Republic of China.

Connecting China’s social stability, the CCP, and the Brazilian soy market

China has a tough job when it comes to food. China is home to about one fifth of the world population, but it holds only some 9% of its arable land and 6% of its freshwater. This creates a food security bottleneck that could affect governance and the stability of Chinese Communist Party (CCP) rule in the country.

As a Marxist-Leninist institution, by design, the CCP partially draws legitimacy from material-abundance agendas. In other words, the CCP’s legitimacy hinges on delivering tangible economic and material benefits to the population, as its Soviet predecessor illustrated, in the negative.

China’s agricultural sector has modernized significantly, but the country is still technically inefficient, soil fertility is low, and corruption and disorganization still hinder crop output levels.

The General Secretary of the CCP, Xi Jinping, included food security in his Holistic National Security approach. However, his (public) concern with food can be traced back to 2013, during the annual Central Rural Work Conference. By Xi’s account, China should “[m]ake reasonable use of the international agricultural products market”, and “formulate international trade strategies for important agricultural products,” including by optimizing the “layout of import sources” through “stable and reliable trade relations.”

This means that China intends to control not just what it buys but through whom it buys it and through what infrastructure.

That’s according to neat Party authoritative interpretations of Xi’s thought, anyway. Reality, however, is somewhat messier.

In practice, China started buying up land around the world decades ago, under the “two markets, two resources” policy by Hu Yaobang. This strategy accelerated after the 2008 global food price crisis.

The approach granted Chinese state-owned companies (SOE), private agribusinesses and funds large amounts of hectares (ha) of arable land to source produce from across the world, including Brazil. However, the moves were perceived as a foreign “land grab,” and the sovereign backlash was swift. For example, in 2010 Brazil modified its 1971’s Land Acquisition by Foreign Residents Law, to tighten foreign control over Brazilian rural land, after a series of high-profile land purchases across Latin America and an attempt to lease over 1.2 million hectares in the Philippines by Chinese actors.

China also picked up quickly that land ownership is a bad vehicle for food security at scale: a visible, politically vulnerable, and physically dispersed sourcing system cannot match control of the commercial infrastructure through which all producers must pass. That system itself is what captures value from every field simultaneously.

Thus, China pivoted away from the negative diplomatic connotations of land purchases—even if the acquisitions were not necessarily vast—and focused instead on successfully inserting itself in the value chain of global agricommodities. Changing land laws in Brazil and other countries—while reasonable from a protectionist standpoint—did not change China’s intent in addressing its food security problem.

Following this, China continued to target the Brazilian agribusiness—especially it’s soy market—as a significant source of its food imports, and took concrete steps to direct major investments there.

Upstream: China buys access to Brazil through Noble Agri and Nidera

In the early 2010’s, China’s involvement in Brazil was the highest in Latin America, which received about $10 billion in FDI from China in the 2010-2013 period, in total. Chinese involvement in Brazil kept rising in 2014-2017, right after COFCO (China’s SOE food security arm) acquires controlling stakes in two companies: Noble Agri and Nidera.

In that period, COFCO spent over $3 billion acquiring and repurposing both firms.

The first phase consisted of a tiered acquisition of majority-to-total ownership of both companies, separately. First, Noble Agri, the agribusiness arm of Noble Group, a then-powerful commodity trader based in Hong Kong. Second, Nidera, another major agricommodities trader and seed developer company based in the Netherlands.

Noble and Nidera gave COFCO—that is, China—an instant foothold in the origination business of agricommodities in Brazil, where both firms had a substantial presence.

COFCO did not just acquire a balance sheet. It acquired close to a century of embedded relationships with producers, grain elevator operators, and logistics intermediaries in Argentina and Brazil. That is institutional knowledge and commercial infrastructure that cannot be built from scratch in a decade.

In other words, in a couple M&A moves, China bypassed the entire sourcing and trading business and became itself the frontline trader at farmgate, including with Brazilian soybean farmers and cooperatives, massively cutting its own operations costs, and capturing a margin that would otherwise go to intermediaries and to the farmer itself.

Furthermore, the importance of this development lies in that it gave China a foundational entryway in a business that is virtually controlled at all stages by the so-called ABCD companies: ADM, Bunge, Cargill, and (Louis) Dreyfus.

The results were immediate. By 2018, COFCO was importing as much soy as Dreyfus and more than ADM. The ABCD companies built their positions in South America over a hundred years, China did it in less than ten years.

However, in absorbing Nidera, in particular, China acquired a bit more than logistics gains. At the time of acquisition by COFCO, Nidera Seeds (the seed business within Nidera) held the intellectual property (IP) and commercialization network of one of the most profitable soybean strains in the market: the NA 5909 RG. That soybean variety is vastly disseminated across the Brazilian soybean market. Here, the second phase of the process began, which consisted of a multipronged re-acquisition and partitioning of Nidera by Chinese entities.

ChemChina, a Chinese SOE that deals in agrochemicals first acquired Syngenta, a Swiss-based pesticides and seed business company, between 2016-2017. Syngenta, subsequently, acquired Nidera Seeds from COFCO. ChemChina is part of SinoChem, a SOE holding engaged in agrochemicals, fertilizers and a petroleum industry producer for both civilian and military purposes.

Thus, through its companies, China now has increasing leverage over the Brazilian upstream soybean market not only at farmgate through origination, but also at the input level through IP, by selling to the Brazilian farmer one of the high-yield seeds the market covets.

This is the first stop where margin compression becomes real for the Brazilian farmer. The rent extraction goes on down the value chain.

Midstream: The infrastructure buyout, further margins capture, and Brazilian politics in the way of the soybean market

Last year, COFCO acquired 979 train wagons and 23 locomotives for grain transportation stemming from the Brazilian interior. The company announced it intended to move 4 MMT from “key producing regions” to COFCO’s export terminal in the Port of Santos: TECON 11. Right next door to the coveted TECON 10.

COFCO acquired TECON 11 in 2022, on a 25-year lease that granted it exclusive rights over reception, storage, handling and exporting of all cargo that reaches the terminal. The company has been working on the expansion of the terminal since. This is in addition to CMPort (another Chinese SOE) already owning 90% of the Paranaguá Port, Brazil’s second largest soybean exporting hub, after the Santos Port.

Furthermore, China, Brazil, and Peru have plans to build the so-called Bioceanic Corridor. This is a transnational logistics and transportation project that would connect the eastern Brazilian ports to the deep-water mega port of Chancay in Peru. COSCO (the Chinese shipping SOE flagship) owns 60% of the port, with little interference from the Peruvian Port Authority (APN).

While the Bioceanic Corridor remains mostly a memorandum of understanding (MOU), in practice, the idea alone is a clear signal of the true Chinese ambitions in Brazil. China aims to build a coast-to-coast trade infrastructure for the Brazilian grain market where they control the process from end to end. As a supplementary byproduct—in theory—this system would also become a closed loop, reinforcing a cycle where Brazil ships raw materials at cost and China sends back manufactured products at a premium.

China is re-defining a type of neo-colonial dependency that does not need land ownership, currency manipulation or lopsided trade and tariff agreements. Instead, the relationship is evidenced in the capture of rents at every stage of the production process: There is infrastructure control at the exit points in Santos, Paranaguá (and tentatively Chancay) of the flows control through input (seed IP) and origination (trade and infrastructure) at the interior points.

This is also where Brazilian politics come in again, and realities on the ground bite the soy industry.

Last February, the Lula administration walked back a privatization decree that put Brazil’s northern waterways in the hands of grain operators and logistics companies. These are the three rivers (Tapajós, Tocantins, and Madeira) collectively known as the backbone of the Arco Norte system, which liberates Brazil’s soybean production from the landlocked interior into the Atlantic, via the Amazon river, to which the Arco Norte is connected.

Indigenous peoples in the lower Tapajós river protested that the privatization occurred without their social licensing it, and thus they occupied Cargill’s facilities in Santarém. The Brazilian government ratified the Indigenous and Tribal Peoples Convention (ILO 169) in 2004, so it had to abide by it and side with the protesters, as it was the indigenous peoples’ right.

However, this poses a serious cost chokehold for the soybean market in the Brazilian interior. To the landlocked region, Arco Norte is the cost competitive alternative to the Santos route in the Southeast. Brazil’s center-west region, El Cerrado, has become the tropical savannah equivalent of the American Cornbelt in the Midwest, yielding the highest volume of soy in the country. The original privatization decree aimed to modernize, dredge, and build more grain capacity in the Arco Norte. If that possibility is delayed indefinitely or taken away altogether, cost competitiveness will erode for the region. Thus, the natural reaction of the Brazilian farmer in Mato Grosso or Tocantins may be to turn to China’s growing infrastructure in the Southeast, and even begin to consider the Bioceanic Corridor to Chancay as a realistic option. Political pressure will follow, and margins will compress even more for the farmer.

Again, if the infrastructure owner is also the biggest buyer (COFCO), then the rent captured at the infrastructure layer effectively reduces what the Chinese state pays for delivered grain. The Brazilian producer receives less than a competitive market would deliver.

The point is not that Brazilian producers have no options, the price at which COFCO buys from a farmer is not set in a vacuum, but at the margin of the next best buyer. The point is that the progressive concentration of infrastructure in Chinese state hands shifts the competitive equilibrium in ways that compress producer margins at the edge.

Brazilian producers are not being impoverished by China, nor would they be better off in a world with no Chinese investment, but they are not receiving the competitive market value of what they produce, given the investment Brazil made in its own agricultural development. The producer works harder, plants more, deforests more, and the margin improvement gets captured with the terminals, the trains, the ports. Also, the Brazilian state itself is a participant in this system, not merely a victim of it. They favor Chinese investment and simultaneously create policy bottlenecks (i.e. the Arco Norte walk back) that may drive the market to the Chinese.

China captures Ricardian rent by way of capturing infrastructure rent. The natural and technical advantages of Brazilian farming (abundant and fertile soil, water resources, effective agrochemistry, efficient and mechanized systems) that would go to the farmer in a competitive market gets transmitted instead to the trade and terminal side.

The result is that Brazil’s agricultural prowess is subsidizing Chinese food consumption.

Downstream: Chinese S&D control, future price-setting capacity, and the Brazilian farmer’s exposure.

As COFCO’s margins widen in its trading book, no Brazilian farmer is being cheated on any one contract. COFCO’s vertical integration through the value chain and its “sister” Chinese SOEs (and private companies) can absorb and redistribute costs, internally, in a way that the farmer is offered a price that clears the market while still capturing the rent efficiency as profit.

Eventually, if COFCO controls enough of the soy origination business, it can time its buying. It will know, better than any market participant, what real harvest volumes are, what is in storage, and what is moving at any given moment. That information advantage, combined with the ability to accelerate or slow throughput at terminals it controls, means it can influence the conditions under which prices are discovered.

This is not to say that China—today a price taker—may come to set prices itself, only that they may influence the conditions of their discovery.

Vertical integration will not give China the power to dictate what Brazilian soy costs. However, it may give China the power to systematically ensure that Brazilian soy costs less to deliver to China than any competitive alternative.

The Brazilian producer, on the other hand, will remain exposed to global price discovery. China, due to its massive position in the soybean sector, may get market price minus the infrastructure efficiency advantage it has built at state-subsidized cost of capital. Over time, that advantage compounds.

Brazilian politics may be waking up to this fact, nonetheless. The question remains whether they have the capacity (and the interest) to intervene. At 179.8 MMT handled per year and expanding, the fight over the Port of Santos is one of the early indicators that Brazilian regulators are at least aware of what’s at stake. Everyone wants a piece of the port, including China. To what degree Brazilian authorities understand the problem is unclear.

In the meantime, it is the Brazilian farmer who continues to be stuck at the center of economic statecraft coming at them from all angles. The farmer, the piece without which the entire system crumbles, is also the weakest. Real profits elude the Brazilian fields and the biomes they take over through land conversion, which are getting decimated in the name of production volumes that do not get re-distributed to the true owners of the wealth it generates.

Brazil spent the 20^th century trying to leave its colonial past behind—often unsuccessfully. Now, they’re facing the same problem in this century, yet again. Oligopolist practices by SOEs overseas have the capacity to take what’s sovereignly Brazil’s without so much as the threat of violence, like the old powers used to do.

^[1] The port of Santos, South America’s largest port by volume, sits just east of Sao Paulo and south of Rio de Janeiro, at the intersection of the southern axis of Brazil’s agricultural production. Facing the southern Atlantic, Santos handles over 5 million shipping containers (TEU) per year. The tender the government wants to issue is for a 25-year concession worth $1.26 billion in development plans. The resulting expansion of the terminal could bump Santos to 9 million TEU per year.

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© 2026 Manuel Reyes, The Southern Trade Group™. All rights reserved. Content may not be reproduced without permission.

On March 3rd, 2026, I woke up to the news that a few blocks from home in Washington, D.C., a San Francisco nonprofit had filed a complaint in federal court against Chubb Limited, one of the world’s largest insurers. The nonprofit, As You Sow, and Chubb have been embroiled in a never ending boardroom and legal battle since 2019 that may end up deciding whether climate change activists can exert indirect influence over climate policy in the Global North without political control earned at the voting poll. This strategy, however, may end up passing on the cost of Green Capitalism to the Global South in the process.

The relevance of this particular lawsuit is embedded in the nature of the ask, tucked behind the legal jargon. As You Sow argued that Chubb blocked a shareholder proposal containing one single demand: that Chubb commission a report to assess whether it is viable to “pursue compensation” from “responsible third parties,” to offset the cost of climate-related losses. In other words: As You Sow wants Chubb to sue the oil and gas industry worldwide.

At scale, this may produce deep, even crippling consequences for the petroleum business. The effects, however, would not be contained to the target industry alone. Cripple the fossil fuel industry at a global scale and you get a spillover effect extending to all the other industries highly dependent on it, including the logistics, infrastructure, transportation, and agricultural sectors. This is so because there is no substitute for fossil fuels today at scale. No matter what activism says, physics says otherwise, unfortunately.

But why Chubb?

Chubb is a company with global presence, with gross premiums revenues of $62 billion, and asset values of $272 billion. If Chubb were a country, its GDP would be larger than Iceland’s and its balance sheet would be the size of its entire banking system. Their reach and their pockets are deep. Then, there’s also what they do for a living.

Chubb’s core business by volume and revenue, its property and casualty (P&C) line, registered a $31.29 billion in net premiums earned (NPE) in 2019 and $53 billion NPE in 2025. P&C risk underwriting is what pays for your smashed phone, or your busted kitchen after you torched it cooking farmed salmon. This is Personal P&C. However, P&C is also what pays for a blown up oil refinery in the Gulf after an accident, it is what secures project finance or lending for a state-owned oil company like Mexican PEMEX to drill, and it is also what pays for cold storage for agricultural produce waiting to be carted north to the United States. This is Commercial P&C, and Chubb’s Commercial P&C is about 38% of its total NPE in North America alone.

Chubb, as it turns out, is virtually present in every aspect of the mechanisms that control our daily lives, like our communications, our transportation, our electricity, the packages we order on Amazon or Shein, and the food we put on our table. Through its clients, Chubb underwrites risk, insures and invests with a depth that no other industry has the power to replicate. Thus, Insurance is king.

To Kill an Industry, First Kill Its Insurance

Every major industry in the Global North faces moral and material pressures to adopt more climate-friendly policies and corporate strategies. Aeronautics could develop more fuel-efficient turbines; Mining could deal more competently with waste and tailings. For those industries and many more, it is relatively easy to point to the pressure point and target it. However, insurance is different insofar as the industry itself is not where the target of climate activism is, but rather the infrastructure that sustains it. That is, a coal company can be protested and divested from, and it will still operate as long as it can finance and insure its assets.

This defeats the purpose of climate activism. Thus, activists realized that if they cannot eradicate an industry directly, they must remove the preconditions for its existence. Insurance is one of three such preconditions, alongside with banking and project finance. A business cannot build, operate, or finance an industrial asset without insurance in any modern economy. There’s no escaping this basic financial tenet.

This makes insurance the master key to all other target industries. A bank can be pressured to stop lending to fossil fuels, but the bank can be replaced by another bank, including non-Western ones beyond the activist’s reach. However, when Chubb underwrites a refinery or a port terminal, it does not carry that risk alone. Instead, Chubb re-distributes that risk across a network of global reinsurers to share the burden if the assets are lost. That industry network is finite, and it faces the same activist pressure simultaneously. There is no replacement for this industry. Thus, if activists pressure an insurer of Chubb’s caliber to stop guaranteeing certain activities or to operate under certain criteria, the replacement problem becomes systemically impairing for the uninsured.

Insurance, also, is special because of its access to information. On paper, an insurer knows more about a client’s operations, risk profile, and exposure than almost any other counterparty. Activists understand that embedding greenhouse gas (GHG) emissions criteria into underwriting decisions means embedding climate policy into the most intimate financial relationship a company has, where the insurer can demand disclosures, set behavioral conditions, and price non-compliance directly. No other financial intermediary has that operational visibility.

Enter the climate insurance wars.

An activist call to arms: Chubb stops underwriting coal in 2019

The standoff between the activist shareholders and the insurer didn’t just suddenly come to a head this March. It all started with seemingly good news in 2019, when Chubb announced, of its own accord, that the company would stop underwriting risk for coal-related activities and investments. This was, in all honesty, an important step forward in fighting climate change.

Chubb committed to stop insuring new risks for companies that generate more than 30% of revenues from thermal coal mining and to phase out existing coverage by 2022. At the time, this was framed by Chubb’s CEO, Evan Greenberg, in the spirit of environmental stewardship. Across the boardroom, however, an activist shareholder coalition read the move as a tactical opening and an invitation to escalate. Chubb, in that moment, did not realize that a particular logic was being embedded in the activist rationale for the company: a concession, instead of a settlement, was actually both a sign of weakness from Chubb and a beachhead for the activists’ climate goals.

The first coordinated action happened in 2022, when Green Century, one of the activists in the coalition, filed a resolution requesting Chubb to adopt policies to stop underwriting new fossil fuel extraction, in line with the IEA’s Net Zero Emissions by 2050 Scenario. As You Sow, separately, filed a proposal requesting Chubb to issue a report on whether and how it intended to measure, disclose, and reduce GHG emissions from its underwriting. The Board recommended against both proposals. Green Century’s proposal was voted down, but As You Sow’s passed, after garnering more than a 72% support. This is how the highly controversial Scope 3 protocol entered the world of Chubb Limited.

This was a pivotal moment and the height of institutional support for the coalition’s goals. The kind of support that As You Sow’s proposal received was not a mere protest vote. Nearly three quarters of institutional shareholders voted yes, including the New York State Common Retirement Fund, a nearly $298 billion investor behemoth with political clout that represents a key U.S. constituency of over 1.2 million New Yorkers.

That year of 2022, I spent my spring break at the U.S.-Mexico border in Laredo, Texas, conducting interviews in Spanish with destitute immigrants turning up at the border. To get there, I’d driven south from San Antonio. The highways of Texas stemming from the border were an endless stream of north-bound trucks carrying products to the interior of the United States. The large majority of these fabulous fleets of diesel sponges were carrying agricultural products. I was amazed at the sheer scale of the logistics keeping the United States fed, and got overwhelmed at the thought of the operating costs of these supply chains. Then and there, and for the longest time, I did not realize that each truck, the owners of the cargo, the people loading or unloading goods, the fuel producer, all had two things in common: they depended on the petroleum industry, and they all needed insurance. Knock down a single one of these delicate pieces, and the system collapses like a domino chain.

By 2023, Green Century tried again to phase out all fossil fuel underwriting. Chubb suppressed the initiative by taking the matter to the U.S. Securities and Exchange Commission (SEC.) The SEC found for Chubb, saying that in their view, the proposal micromanaged the company. Chubb won the procedural fight, then immediately announced an oil and gas underwriting restriction in protected areas, surrendering the point. As You Sow, meanwhile, re-filed and lost its Scope 3 proposal. This time support collapsed to 28.93%.

The signs were clear that activist pressure was not relenting. The government also got involved in the summer of 2023. The U.S. Senate Budget Committee opened an investigation into the underwriting practices of major insurers operating in the United States, dragging the controversy to the public eye. In 2024 Green Century and As You Sow co-filed for Scope 3 one more time, but by then the mood on the topic had soured across the shareholder crowd, and support collapses again to 28.3%.

Scope 3: When the Math won’t cooperate and nobody backs down

It should be said that the proposals based off Scope 3 disclosures were not a vague gesture toward greener values. This was a specific technical demand made to Chubb to implement: collect GHG emissions data from every entity Chubb insures, across their entire value chain, processed against international reporting standards, and embed those emissions profiles into underwriting decisions.

Chubb’s Board correctly understood that this was methodologically impossible, including from a scientific point of view.

In their proposals, the activist coalition repeatedly asked for a highly advanced, technically complex combination of often unavailable data disclosures by third parties in the value chain of the underwritten activities, as well as for reporting practices that remain unstandardized, and resource allocation efforts that may not be reasonable to expect, even in the context of a large company like Chubb, which commands a great deal of human and financial capital. Indeed, Scope 3 data collection would require disclosures by entities throughout an insured client’s entire supply chain, who are generally private companies in multiple international jurisdictions with no legal obligation to report anything.

If a company is based in and operates from select areas of the Global North, on a relatively closed-loop supply chain, with relatively known (and a small amount of) partners who share the same regulatory, fiscal and incentives regime, then Scope 3 may not seem such high-bar standard to comply with. However, when you operate at a global level, and your business covers virtually every aspect of commercial (and non-commercial) activity under the sun, the task of complying with Scope 3 becomes not just Herculean, but simply unfit for the purpose.

In the case of Chubb, their legacy business model is different from that of a research institution, which is what the company would have had to turn into in practice, to satisfy the standards of Scope 3. That is, Chubb’s subject matter expertise lies in assessing risk on a case-by-case basis, not on a global scale as the GHG disclosures system requires.

At least until the end of 2024, the proxy campaigns for Scope 3 persisted, but the votes in favor continued to be low, even as Chubb repeatedly made important concessions. The insistence on the point, however, wore down the patience of the institutional shareholders, and their support for the activist coalition declined considerably.

Mexico and the cost dilemma of the humble tortilla

At the very end of 2024, I am in Mexico City for work. I am in a high-rise office in La Reforma, surrounded by U.S. State Department officials, taking notes like a maniac on security cooperation programs between the Mexican and U.S. governments. I can see the Angel de la Independencia Monument from the window, barely a block away, and the Popocatépl volcano smoking away in the distance. It’s so beautiful and perfect.

Yet, when I come downstairs during lunch, I realize that prices are higher than they were six months earlier, when I last visited. It is not lost to me this time that a lot more people are buying their food from street stalls than they are sitting in restaurants. Masses of white-collar workers are huddling around the budget-friendly stalls.

I spent a week having lunch around the office, and befriending the stall vendors. In snippets, I learned from them that there was a drought that year, and the crops were not that plentiful, so the price crept up little by little. Mexico’s government had also cut off subsidies for the country’s major corn producers after a reform in recent years. This forced Mexico to import large quantities of corn, including from the United States.

If the corn comes from farther away, the corn tortilla’s price experiences upward pressure. The entire supply chain runs on the diesel that powers the trucks, the trains, the ships, the cranes at the ports, and the corn mills. In the 2018-2024 period, the cost of tortillas steadily rose more than half, from MX$14.33/kg to more than MX$22.0/kg. Thus, diesel is not only the lifeline of the Mexican tortilla, but also its price floor. This is not to say that climate activism caused a tortilla price spike in retrospect. Rather, it means that activism is certainly not factoring in any of these costs when trying to decide future climate policy, with global implications, through boardroom battles and lawfare in U.S. courts.

Chubb is the third largest property and casualty insurer in Mexico by total premium volume, writing MXN 28.2 billion annually. Within that book, the industrial lines matter most. In General & Commercial Liability, covering operational risk for refineries, gas pipelines, and petrochemical plants, Chubb writes MXN 2.04 billion annually. In Marine & Transportation, covering logistics chains moving fuel, produce, and manufactured goods across the country, MXN 1.79 billion. In Fire & Industrial risk, covering fixed industrial installations against explosion and damage, MXN 1.49 billion. And in Catastrophic Risk, covering tail risk on large-scale infrastructure, MXN 1.68 billion. This is the insurance backbone of Mexico’s fossil fuel-dependent industrial economy, and the coverage that no domestic Mexican insurer has the reinsurance architecture to replace.

Thus, beyond incremental curtails of fossil-fuel underwriting, if Chubb is also eventually steered into suing the fossil fuel industry, then the consequences may extend well beyond the target. Activism would not simply be effecting justice for homeowners on the coastline of New York or on the wildfire-prone hills of California, they would also be creating, slowly, the conditions for structural food shortages and political unrest in the Global South. Mexico is but a sample drop in a sea of countries dependent on insurance to finance their agricultural, infrastructure and logistical operations.

The cost transmission mechanism of climate insurance, and the lawsuit in D.C.

In Mexico, what makes Chubb’s role structurally distinct from a regular market participant is not even its balance sheet exposure. Rather, what’s important is its position as the point of entry into the global reinsurance network. Chubb is the biggest cedent in Mexico by total premium volume, 30% ahead of its closest competitor, Mapfre. What’s more, if Chubb were to exit the country and Grupo Nacional Provincial (GNP)—Mexico’s second largest P&C insurer—tried to absorb its book, GNP would need to multiply its entire reinsurance cession by a factor of four.

When Chubb underwrites a PEMEX offshore project or a cold-storage logistics hub in Monterrey, it redistributes about 61.5 cents of every peso of premium into a chain of international reinsurers who absorb the tail risk. Again, re-distribution is what makes large-scale industrial activity insurable in the first place. Restricting Chubb’s legacy business model will not simply remove one insurer from the Mexican market, but rather impair the access point to the entire chain. Without it, the risk becomes uninsurable at a cost, and therefore unfinanceable.

In 2025, Green Century tried to get Scope 3 passed one last time. Support cratered to 13.9%. As You Sow took notice and moved on from Scope 3, understanding that the way to keep going was to sprint ahead. This is what led As You Sow to file the proposal that Chubb last tried to suppress, and that landed them in Court this March, after the SEC refused to intervene.

This lawsuit now sits astride the convergence of administrative law, securities regulation, and corporate governance, all at the same time. As You Sow is no longer asking for meticulous directives of Chubb’s day-to-day operations, like Scope 3 required. That would land them again in the trap of shareholder overreach. Instead, they are cleverly asking for a report that would force Chubb to evaluate its own corporate posture on climate liability, which could then be resolved by the routine mechanism of subrogation. There is a question of public policy.

A substantive issue of law is being presented as a procedural matter. It may be that As You Sow is using the threat of court as a dispositive tool, simply to make Chubb settle quickly by re-including the proposal in this year’s shareholders meeting. Chubb, on the other hand, may try to stall the case, unglamorously, until proxy season is over and the issue becomes moot, instead of trying its hand at litigation in a case so inscrutable.

Caution, market sense, and science should be the guiding principles of exerting influence over companies, not zealotry alone. The solutions to climate disasters are not solutions at all if a minuscule group of constituents in one corner of the world imposes top down policies through the conduit of a multinational corporation outside all democratic processes. Activism for climate change, however laudable, cannot turn into ideological capture of any or all institutions with a balance sheet. This is so, especially, if the costs—which are serious—are just being swept under the rug and sent elsewhere later.

To the South of the globe, the realities of life are still run by combustion engines and extractive economies. The Global South is already paying for climate change in drought years, in erratic harvests, in coastal erosion, in extreme heat oscillations. Indeed, the Global South also contributes to climate change, but it did not cause the original problem in any proportionate sense. Now, it may soon be asked to pay again, in higher logistics costs, in restricted access to project finance, in uninsurable infrastructure. The folks selling or buying tortillas in Mexico City may eventually absorb both bills, as a tax they did not vote for, imposed by people no one elected to hold office, neither in their country nor in the U.S.

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Ricardo Roa, Ecopetrol’s CEO, is in the news again these days over corruption accusations. The executive remains formally implicated in alleged electoral irregularities tied to Gustavo Petro’s 2022 presidential campaign, despite continued support from his board. This, of course, is not good news for the business he runs nor for its shareholders. Corporate governance of the company that shoulders up to 10% of Colombia’s annual revenues is in freefall.

Political interference by the Petro administration is dismantling the board of directors’ independence at Ecopetrol, inflating costs and forcing the rejection of valuable business. These developments are setting the stage for potentially long-term damage to Colombia’s economy. Undue government influence over Ecopetrol threatens not only shareholder value, but also the country’s fiscal backbone and future business climate.

Ecopetrol is Colombia’s biggest oil producer and one of the largest on the continent. The company is listed in the New York Stock Exchange (NYSE), and it is a majority-state owned company. The government of Colombia holds over 88% of the company’s stock, with the remainder publicly traded. In November 2025, Colombia’s Electoral Board (CNE) imposed a fine of ~$1.4M on Roa and other Petro campaign associates for violations of campaign finance rules on spending limits. This was an administrative process, and President Petro vehemently objected to the finding against the CEO, attributing it to a political persecution by the opposition. Now, the attorney general has also indicted Roa over the matter. Furthermore, the executive’s legal woes are only increasing. Roa is also being investigated for an apartment purchase he made, after the original owner was granted Ecopetrol gas concession contracts, allegedly with Roa’s influence.

At this point, the situation is hardly surprising. Roa’s tenure at the helm of Ecopetrol has been marked by controversial decisions inside the company, including alleged interceptions of internal communications and interferences with contract management processes. Additionally, Roa’s character has repeatedly been called into question by a number of Colombian senators, after he disobeyed summons at Congressional hearings. As the president of a majority-state owned company, Roa is considered a public servant under Colombian law, and his conduct is subject to stricter standards than private individuals.

Roa was appointed Ecopetrol’s CEO soon after Petro assumed Colombia’s presidency. The Petro administration has an aggressive anti-fossil fuel policy that orchestrated a fracking ban in Congress and halted exploration projects in Colombia, including suspending agreements with ExxonMobil in 2023. Instead, President Petro favors a renewable energies transition agenda. Ironically, his ex-campaign manager, Roa, has been the one quietly pushing back in favor of more conventional exploitation of fossil fuels. However, Roa remains a close political ally to Petro, so he has dutifully enforced Ecopetrol’s green transition since his appointment. Consequently, the company’s legacy business and its bottom line have taken a nosedive.

Under Roa, Ecopetrol’s key performance metrics have declined sharply from their 2022 peak. Net income fell from $7.85B in 2022 to $3.6B in 2024. Likewise, earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped ~28% over the same period. The company’s share price remains well below its 2022 year‑end levels, despite intermittent rebounds. Proven reserves are down a net 3.3% overall (2,011 mmboe in 2022 to 1,944 mmboe by end-2025), even after a small recovery last year. The moratorium on new exploration, however, means the company’s remaining reserves will be depleted by 2030. Consequently, Ecopetrol is sweating its wells from mature fields to offset the loss of reserves.

Under the previous Iván Duque administration (2018-2022), Ecopetrol benefited from pro-oil policies and oil price recovery post-COVID, leading to growth and overall profitability in early 2022. This is not to say that Ecopetrol was free of problems under Duque, but in the Petro era, the moratorium on new licenses, tax reforms, and alleged political interference have notoriously coincided with declines in profits and share value, fewer business opportunities, and elevated executive turnover.

It is true that the Petro administration has faced challenging global factors like oil price volatility, but Colombia’s president inherited a profitable company with rising reserves that also greatly benefited from a spillover of talent fleeing neighboring Venezuela and economic collapse. Oil engineers, geologists, lawyers, logisticians, and operations managers have been leaving Venezuela in droves for Colombia since the early 2000s, after Venezuela’s PDVSA was purged of technical experts in favor of corrupt political appointees. This talent managed to bolster Ecopetrol’s production levels to new heights, driving record profits for the company. Now, the company’s downturn under Roa correlates with Petro’s reforms, signaling squandered opportunities and an executive branch progressively encroaching on the company’s business decisions, eroding the board’s independence.

Ecopetrol’s board of directors has been overhauled almost entirely since Petro assumed Colombia’s presidency. To date, 17 executives have either resigned or been ousted. Many departures occurred amid reported turmoil, purges, and government influence on the company, though some were described as voluntary resignations or retirements. This has accentuated the perception that the company’s decisions are increasingly driven by political considerations rather than corporate ones.

One of the most poignant examples took place in 2024, when two executives on the board of directors resigned over the company’s decision to decline the invitation by partner company OXY to increase its position in the Crownrock Project to 30%, in the Permian Basin, Texas. For a company with embattled finances, the Crownrock Project meant further expanding a lifeline of 67,000 barrels of oil extracted daily in one of the most prolific and cost efficient basins in the world. The decision to fold from additional investment only added more uncertainty to the company’s business model.

Today, there is still an ongoing public debate in Colombia about Petro’s public desire to sell Ecopetrol’s position in the Permian Basin altogether. Ecopetrol could lose 30% of its value and 10% of its reserves if it sells the company’s most valuable asset.

Ricardo Roa has no opinion on the matter other than favoring the government’s position—that is, Petro’s position. Despite his dismal record, however, it is unlikely that the CEO will be deposed in the upcoming voting season, next month. Shareholders may be less scared of Roa than of a more radical appointment by a presidency bent on imparting policy guidelines to the company.

The Petro-Roa tandem has clearly undermined the board’s independence and the company’s legacy business model, and in practice the pair has abolished Ecopetrol’s corporate governance all but in name. However, losing Ecopetrol to mismanagement is not an option for Colombia. The consequences of the company’s decline may be felt for decades, given its contribution in taxes and royalties to government coffers, and could limit fiscal space for public service delivery and economic development. Indeed, Colombia has some of the region’s highest poverty rates, where over half the workforce is employed in the informal sector, a child born in the bottom decile needs 11 generations to reach the top, and 7.3 million people are internally displaced due to an unresolved armed conflict.

Furthermore, Ecopetrol is listed on the New York Stock Exchange, and it must file its financial reports with the U.S. Securities and Exchange Commission (SEC). Thus, the prolonged legal exposure of its CEO and credible concerns about Petro’s political interference are no longer merely Colombian domestic matters. U.S. securities rules require full disclosure of material risks, including governance breakdowns that could impair fiduciary duties to minority shareholders or even raise issues under the Foreign Corrupt Practices Act (FCPA) under certain circumstances. If U.S. regulators conclude those risks are not adequately addressed, the company could face heightened scrutiny, enforcement, and reputational damage in U.S. capital markets.

In the meantime, on the other side of the Amazon forest and down in the Patagonian deserts, another two state-owned oil companies, Brazil’s Petrobras and Argentina’s YPF, seem to be following a very different model of governance. Both governments have largely refrained from micromanaging day-to-day business decisions, allowing each company’s board greater operational autonomy. While these companies are not free from historical controversies, their governments’ recent approach has coincided with stronger income-tax and royalty flows to the state, accelerated adoption of technological innovations in deepwater and shale extraction, and sustained exploration successes in Brazil’s pre-salt fields and Argentina’s Neuquén Basin. This model seems to be an ironclad rule across partisan lines for both Brazil and Argentina, which are controlled by left wing and right wing parties, respectively. Colombia, on the other hand, appears intent on killing the goose that lays the golden eggs by insisting that political priorities should override corporate governance principles.

Ecopetrol is not a discretionary instrument of the Petro administration. Rather, it is a majority state-owned company whose fiduciary obligations extend to the Colombian public and to its domestic and international shareholders. If the company’s governance continues to erode at such aggressive pace, the consequences will not be defensible under the guise of political arguments. Under Petro’s and Roa’s influence, the company risks making operations more expensive, and strategic partners may think twice before joining ventures. Minority shareholders may demand higher risk premiums, potentially leading to sovereign credit risk downgrades.

For a country that relies on Ecopetrol for a meaningful share of government revenues, weakened corporate independence will soon stop being a mere political issue and could adversely impact the country’s economy. Next door in Venezuela, Colombia’s neighbors learned that lesson the hard way.

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HAVANA — Two weeks since the Trump administration announced an oil embargo on Cuba, the island’s fragile economy is grinding to a halt. However, the external actions of Washington are only a nudge in a decades-long process of decline driven by government mismanagement and institutional rigidity.

Businesses are shuttered, public services collapsed, and transportation is almost non-existent. Rhetorically and in practice, the country’s leadership has no proposition other than so-called “Resistencia Creativa” (or creative resistance)—an amorphous statement by President Diaz-Canel that he repeatedly pitches as the solution to the crisis. Reality on the ground, however, is much starker.

“Folks at the crematorium say there’s no petrol,” my cousin texted me over a week ago, “so I’m just here, chilling, looking for ‘the petrol guy’ to incinerate grandma’s body.” There is no “petrol guy”—crematoriums run on gas—it was code for the employee stalling my cousin’s turn in line until receiving off-the-books fees. I read the text with the same “chilling” attitude but got to work, telling him I’d arrive in 24 hours. We chatted on, unfazed. Cubans are used to dealing with such grim situations or worse.

I flew to Havana the next morning with cash and 36 pounds of both dry and frozen goods, gathered on short notice. Typically, trips to Cuba take months to plan and ~$500 for every 50 pounds of essentials bought like clothing, shoes, medications, vitamins supplements, coffee, toothpaste—notwithstanding plane tickets and subsequent in-country expenses, like transportation and gifts. This excludes monthly grocery delivery bills that many Cuban emigrees pick up for a bevy of essential staples, through government-controlled online shops, and payable only in foreign currencies like dollars or euros.

The average monthly salary in Cuba is 6,649CUP, or ~13USD, and the average retiree’s pension is ~4USD—less than what it costs to buy a carton of 30 eggs in today’s market (~5USD). It costs a Cuban emigree roughly $200/month worth of assistance in goods and services per family to subsidize the Cuban government. I say subsidize the Cuban government, and not one’s family there, because Cuba has a centrally planned economy. Every major source of services, products, and commercial activity is owned by the government, not private initiative, by constitutional mandate.

In practice, when the Cuban government struggles to deliver goods or services, much of the gap is filled by Cuban emigrees abroad through remittances, direct shipments of essentials, and informal support. As a result, emigrees absorb substantial costs—essentially the price of maintaining their families’ basic stability—allowing the system to persist without meaningful reforms to state controls and limits over private sector growth.

Thus, news outlets are now highlighting the energy and multi-factor crises following Washington’s tough stance on oil against Havana, noting that the island had only about twenty days of reserves beyond the U.S. executive order. Yet, these conditions—fuel scarcity, daily blackouts, persistent inflation, acute shortages, and public health crises from Dengue and other tropical fevers—were already entrenched a month, a year, or five years ago. Cuba produces on average ~ 41,000 bpd of heavy or extra heavy crude (8-15° API), but production has declined steadily. That covers just 40% of its ~100,000 bpd demand, leaving a deficit of about 60,000 bpd that imports have struggled to fill. This is consistent with the persistent electricity deficits of over 1,600 MW during peak hours against a 3,300 MW national demand, where more than half remains unmet, fueling prevalent blackouts and economic strain well before the U.S. executive order.

In 2025, Cuba’s GDP reached a 15% contraction from 2018 levels. The government invested no more than 2.3% of its total budget in either Agriculture, Health, Education or Science, while it allocated 22.2% in Real Estate, to build hotels destined to the Tourism industry—even when visitor numbers indicated a multi-year decline and downward pressure in room demand. The hotels now sit mostly empty, a number of them are closing operations under the current circumstances, and employees are being furloughed in large numbers. Last year, Cuba received the lowest number of tourists in decades, with just 1.8 million visitors, and far from the peak 4.7 million it attracted during 2018. Experts are pointing out that a 20-year gain has been erased, and Cuba is now back to the early 2000’s in terms of number of travelers.

After the COVID era, many Caribbean nations slashed prices and offered incentives to lure back tourists, but Cuba’s tourism struggled with upward pressure on operating costs after a monetary reform that shot up inflation, leading to higher prices that hampered recovery. This strategy made the revenues of the already embattled sector plummet, and diverted business to competitors in neighboring countries. By 2021, these economic pressures compounded over shortages and COVID restrictions, leading to countrywide protests over living conditions. The government’s law-enforcement response at the time drew significant international scrutiny, and stoked a new multi-year exodus that drove away over 1,200,000 of overwhelmingly young, able bodied Cubans from the country.

Last week, President Diaz-Canel offered a 2-hour press conference on TV, addressing the crisis in the wake of Washington’s actions. Many people were not able to tune in due to blackouts, and others reported simply not being interested in what he had to say. “I didn’t waste my time with that,” I overheard a street grocer tell a customer in Alamar, Havana, as I sorted through carrots and onions on the curb. “What was he going to say? Nothing. They only appear on TV to ask for more patience.”

Transportation is one such area where “patience” will be needed. Buses are the main mode of transportation for the average Cuban, but for years the number of active buses dwindled to a trickle, leaving a void on increasingly quiet streets. Now, the government ordered what is left of the public transportation system to stop entirely, among other measures. Until 2025, they argue, officials had been “prioritizing energy for households,” but in 2026 the priority is “the economy” and so the people will have to endure (even) longer blackouts than before, which typically last 10-16 hours a day in Havana alone. “They think they can run a country like this,” the grocer continued, shrugging and grinning, in disbelief. “I truly don’t know where we’ll end up.”

The streets of Havana look empty, desolate. Young people are now a rare occurrence in a city that was known for a vibrant youth culture in the past. Seniors spend their days in endless bread lines or trying to draw their meager pensions from ATMs to pay for just a few staples, as Cuba is a cash-based society. The government does not pick up the trash for weeks at a time, and for a long time now, piles of garbage and refuse grow even next to well-to-do residences in previously posh neighborhoods like Vedado or Playa. The panorama in the rest of the country is even worse, with recounts of hollowed-out towns, collapsed services, and longer daily blackouts than Havana endures. Cuba’s fragility thus gives the U.S. potential leverage if any negotiations ensue—despite official statements that the island won’t collapse and a rebound strategy is already in place.

Historically, the U.S. government position towards Cuba has been regime change. Today, Washington’s foreign policy for the Western Hemisphere is a brainchild of Marco Rubio. His reasoning seems to be that coalitions of left-wing governments and right-wing juntas both had their chances and they blew it: now is the turn for a hybrid model where U.S. intervention is back on the board, but quickly followed by a managed market opening and governance structure that secures space for U.S. interests, not by boots on the ground. Yet, it is not clear from his policies how he tallies human costs. Mr. Rubio himself is of Cuban heritage and has a track record of staunch support for regime change in Cuba, Venezuela, and Nicaragua. After the events in Caracas this past January, Rubio’s policies are no longer confined to the U.S. Senate floor—and thus, his statements should be taken seriously, if not literally at times.

Rubio’s tenure advising aggressive stances to Trump will produce very adverse results for the Cuban people, as is the case already. In the meantime, decision makers in Havana seem convinced that their approach is in touch with the realities of the Cuban public—somehow. They also insist that longstanding U.S. sanctions are to blame for most, if not all, of the country’s woes. It is the case that U.S. sanctions hurt, but picking up the trash, limiting private sector growth, or managing dissent are solely internal decisions.

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Ever since Maduro was spirited away from Caracas in the dead of night, suddenly everyone is an expert on Venezuela, and surprisingly, also on Venezuelan crude.

Commentators are fixated on what a nightmare it would be to wrangle even diesel out of Venezuelan oil. Apparently, Venezuelan crude is a thick paste that is difficult to drill out of the ground, will clog and corrode any pipe system, and yield nothing but low quality derivatives at the refinery. So, why would U.S. refiners want to pump that nasty mud into their equipment?

To top it all off, Darren Woods, ExxonMobil’s CEO, recently stated at the White House that Venezuela was “uninvestable”—right in Trump’s face. The statement surprised administration officials, who wanted to put up a united front with U.S. oil companies. Thus, for the boss of the biggest oil supermajor to publicly back down from the enterprise in front of the president of the United States—just a week after a fleet of Chinook helicopters stormed Caracas—was, to say the least, anticlimactic.

The media ecosystem swelled with Woods’ statement and immediately linked it to the apparent hopelessness of the Venezuelan crude venture and perceived risks associated with re-starting the Venezuelan oil industry.

Not all commentary is off-track. Some reporting recognize increased access to Venezuelan crude as a net benefit. Nevertheless, the internet is rife with contradictory information.

Venezuela is not “uninvestable” because of what’s inside the barrel or some pumps are rusty. Investment is not the issue; fear of forfeiting it is.

Worried about heavy grade oil?: U.S. refineries are ready.

Oil grade is largely divided into three types: light, medium, and heavy crude, according to their API Gravity, the measure to assess oil quality. The higher the grade, the lighter the crude. The lower the grade, the heavier the crude. Lighter oil is considered of higher quality and commands a bigger premium in the market, while heavier oil is of poorer quality and usually sells at a discount.

Much of the Venezuelan crude is indeed a heavy grade, of the sour kind—due to its high sulfur content. It is viscous, and transporting and processing it is certainly more energy and resource-intensive than higher quality oils. However, lower quality does not necessarily mean a bad product, nor a bad investment.

The industry uses heavy crudes to produce the diesel that feeds trucks across the globe. Likewise, it is heavy crude that carries the highest rates of bituminous components and resins, which are turned into asphalt, lubricants, waxes, petcoke and also heavy fuel oils (HFO) that cargo ships and most industrial-grade heavy machinery use worldwide.

Thus, Venezuelan heavy crude is not a synonym for bad oil—it’s just a different kind.

Then, there is the concern that this dark, sulfuric jelly will shoot through the pipes of U.S. refineries and eat away the infrastructure. As it turns out, U.S. refiners have invested considerably in adapting their units to process heavy crudes for decades. The large majority of the refining hubs in the United States undertook this transformation before the Shale Boom of the late 2000s, hedging that as U.S. crude levels dwindled, supply would increasingly come from heavy crudes producers like Mexico, Colombia, Ecuador, and of course Venezuela—unaware that they were on the verge of fracking vast shale reserves.

The media, then, has been quick to rule out Venezuelan oil as a bad business for which the United States has no capacity, on the superficial basis that a heavier crude sells more cheaply and is more difficult to handle.

Venezuelan oil is commercially viable thanks to oil price differentials

Despite high production costs and discounts over quality, oil companies can still operate at a profit in Venezuela. Oil does not have a unified price. Because different oils come from different locations, and extracting, transporting and processing them may vary in difficulty, oils even with the same grade may sell at different prices.

This is what is known as the oil price differential. Already cheap crude flowing out of Venezuela is likely to come to the United States at a steep discount, given the clear preferential treatment Washington secured after scrambling the government in Caracas.

Therefore, U.S. companies will pay a lower price for a barrel of Merey (the name of the Venezuelan heavy benchmark) than for a barrel of Light/Sweet Brent crude or West Texas Intermediate (WTI), the benchmarks for high-grade crude in the market. The Merey lived in the $50s per barrel through 2025, and a price increase is difficult to justify in the present conditions, unless extreme unforeseen events disrupt major-oil producing regions such as the Middle East. In fact, the price may continue to decline as more volume comes online in the future, before it stabilizes.

On the other hand, a price drop is unlikely to cripple U.S. oil producers, who by industry practice, build the discount into the frontload investment. Once production is on, operating costs per barrel are relatively low and stable for long periods. Some discussions signal that the breakeven price in Venezuela can already be set as low as $30-40/barrel if U.S. oil companies ramp up production to 1 million barrels per day—so, there’s enough margin for profit even immediately.

Washington wants barrels: more oil to erode the oil cartel

Another point that deserves more attention is that higher volumes of Merey flowing to the United States—and its finances under control of the U.S. government—will have positive ripple effects for consumers and businesses worried about high energy costs.

While the geopolitical consequences of the U.S. launch of a military operation against a sovereign territory are indeed disquieting, Maduro’s ouster is now a sunk cost, and we can only focus on future implications. As such, it is a remarkable thing that Venezuela, a founding member of the OPEC+ Group, may have to align itself with the interests of the United States, a non-OPEC+ country, moving forward.

OPEC+, the oil cartel, has for decades influenced the price of oil, controlling supply to match the political goals of its members. The politics of energy may change in the future, then, as the United States becomes increasingly assertive over the volumes of crude from Venezuela, the OPEC+ member with the largest reserves. If the United States displays a surplus capacity on all fronts of the oil market, this will erode OPEC+’s capacity to collude against lower oil prices.

Thus, Maduro’s ouster may signal the birth of a new type of energy diplomacy, where the U.S. may be ready to undercut OPEC+-led artificial shortages both in material terms, by keeping production volumes up, and in political terms, by influencing the Venezuelan delegation’s vote in Vienna, where OPEC+ members convene regularly.

“Uninvestable” does not mean what people think it means

The spat between Exxon and the White House has nothing to do with the quality of Venezuela’s crude or the feasibility of recovering the country’s oil infrastructure. Instead, it has everything to do with real liability concerns on the part of U.S. oil companies, suggesting that future developments in the country may not be conducive to a safe investment climate.

For example, in the recent White House meeting, Woods addressed the elephant in the room that Exxon was expropriated from Venezuela twice—in 1976 and 2007—their assets confiscated, the second time without compensation and a still-pending legal battle over a $1.6 billion award, for their troubles.

Understandably, oil companies are more than wary of simply trusting the word of the U.S. president and jumping in, blindfolded, into considerably large deals with such financial uncertainty and risk. What happens to their investment if the President changes his mind, or if the next administration fails to honor Trump’s promises?

However, the matter doesn’t stop there. Under current Venezuelan law, U.S. companies will be required to enter joint ventures (or “empresas mixtas”) with PDVSA—the country’s state-owned oil company, itself a well of corruption. PDVSA will control at least a simple majority stake in all ventures. Its outsized role is a source of concern for oil companies due to a plethora of compliance problems, including the Foreign Corrupt Practices Act (FCPA).

Powerful individuals with notorious records, who guarantee PDVSA’s activities, remain in place in Venezuela after the fall of Maduro, along with the entire military and security apparatus. U.S. oil companies will need stronger sign posts from the administration that moving forward, they won’t face major legal and financial consequences for PDVSA’s activities. Corporate decision-makers do not want to be on the docket of the federal court of the Southern District of New York—next to Maduro and his wife—appearing before a grand jury of their peers.

Furthermore, history does not support the idea that a U.S. oil company will be deterred from doing business abroad simply because of logistical costs or political challenges in the host country. When U.S. oil companies hesitate vis-à-vis big business, they aren’t doing so because of what’s in front of them, but because of what they leave behind them, at home: the U.S. government.

Precedent indicates that the U.S. government turns more sympathetic to the troubles of Big Oil when geopolitical pressures are at play. In 1943, Jersey Standard (today merged into Exxon) was forced into a 50-50 oil profit-sharing scheme with the Venezuelan government, who at the time was leading a nationalist onslaught over its own oil. The U.S. government acquiesced to the deal—even as this meant a lower income tax bill from Jersey Standard—given the need for reliable oil sources during World War II. The pattern repeated in 1950, when Saudi Arabia also renegotiated a 50-50 deal from the country’s concession to U.S.-founded Aramco. The Cold War was in full swing, and the United States needed cheap energy to guarantee the dominance of its military and industrial base. Now, with Venezuela on the roster, the United States is on the verge of controlling a combined 30% of global oil reserves—welcome leverage in another geostrategic race against powers like China and Russia. As in the past, an understanding with oil companies is coming.

For oil companies, “uninvestable” has less to do with technical or financial challenges of operating in Venezuela than with better positioning in the deal with the Trump administration.

Big Oil will go in. The prize is too great, and they have waited the length of the latest dictatorship for it, but they are asking for assurances that this time won’t be like the last.

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