Who Owns Habanos? How a Sanctions Designation Reached the Premium Cigar Supply Chain

Habanos S.A. is the company that markets and distributes Cuban cigars around the world. Half of it belongs to the Cuban state. The other half has changed hands more than once, and in 2026 the question of who holds it became a sanctions problem for companies that never sell a Cuban cigar.

How the stake moved

For years, the non-Cuban half of Habanos belonged to Altadis, the Franco-Spanish tobacco group that Imperial Brands acquired in 2008. In 2020, Imperial completed the sale of its premium cigar business, including that stake, to Asian investors operating through a holding company called Allied Cigar.

Reporting since then has traced control of a large part of that structure to Chen Zhi, the founder of Cambodia's Prince Group. According to halfwheel's account of the ownership chain, a British Virgin Islands company called Simply Advanced Limited, wholly owned by Chen, held a majority of an Allied Cigar fund, which in turn controlled the Spanish company that owns cigar factories and a 28.55% stake in Habanos.

The designation

On October 14, 2025, the U.S. Treasury and the United Kingdom announced coordinated action against Prince Group, describing it as a transnational criminal organization behind large-scale online fraud. Treasury designated Chen Zhi under Executive Order 13581. Federal prosecutors also unsealed an indictment against him. Treasury's announcement did not mention cigars or Habanos, and later reporting found that, among the companies in the cigar ownership chain, only Simply Advanced Limited appeared on OFAC's list.

Chen was arrested in Cambodia and extradited to China in January 2026. The European Union listed him in July 2026, and a Habanos distributor serving Germany, Austria and Poland reportedly suspended operations because of the banking restrictions that followed. Talks over a sale of the stake have been reported but, as far as I can tell, not concluded.

Why a listing reaches companies that are not listed

The mechanism is OFAC's 50 Percent Rule. Under OFAC guidance, any entity owned 50% or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons is itself treated as blocked, whether or not it is named on any list. U.S. persons must treat its property as blocked and may not deal with it absent authorization.

That rule turns ownership percentages into compliance questions. A U.S. company buying cigars from a Dominican or Honduran factory has to ask not only who owns the factory, but who owns the owner, and whether the blocked interests add up to half or more somewhere up the chain. Where the percentages are not fully public, the honest answer may be that the company cannot be sure.

That appears to be the situation Altadis U.S.A. faced. According to halfwheel's reporting, Altadis stopped buying from the Tabacalera de García factory in the Dominican Republic and the Flor de Copán factory in Honduras after the designation, describing the move as a compliance-driven decision, and shifted production to other manufacturing partners. The reporting said it expected no inventory problems in 2026.

The wider damage

The Cuban side of the business is under strain for other reasons too. Habanos reported record sales of $827 million for 2024. The Festival del Habano, where results are normally announced, was postponed in February 2026 and then cancelled in July, with reporting citing blackouts, fuel shortages and canceled flights. Harvests in Pinar del Río have suffered when blackouts stopped irrigation. The ownership turmoil adds a financial problem to an operational one.

What U.S. cigar companies should take from this

The lesson is not limited to Habanos. Premium cigar ownership has become more international and more layered, with private equity, family offices and foreign holding companies at different levels of the same supply chain. A sanctions designation anywhere in that structure can reach a factory, a distributor or a brand without warning.

These are the questions I would build into supplier and partner diligence:

• Who are the ultimate beneficial owners of each factory and distributor you rely on, and in what percentages?
• Do any of them, alone or together, hold 50% or more of an entity in your chain?
• Do your contracts give you the right to suspend or terminate if a counterparty or its owner becomes blocked, and do they require prompt notice of ownership changes?
• Is there a second source for your most important lines if one factory becomes unavailable overnight?

The embargo taught the cigar trade to ask where a cigar comes from. 2026 added a second question: who stands behind the company that made it.