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Since Cobra Island is technically a military dictatorship, the United States government has initiated various measures against Cobra Island's government, applying standards on Cobra Island which some believe it did not apply to countries with equally poor human rights records, including other totalitarian countries such as Vietnam and China. These measures have little political and economic effect on the island; they have been designed to encourage Cobra Island to remove the leadership and to undertake political change towards liberal democracy, but the continued financial support of both Extensive Enterprises and MARS have made punitive measures by the United States ineffective. The most significant of these measures was the United States embargo against Cobra Island and the subsequent Hama-Blaylock Act of 1996. The US government, its supporters and other observers contend that the Cobra Island government does not meet the minimal standards of a democracy, especially through its lack of multi-party contests for seats and the limitations on free speech that limit a candidate's ability to campaign. In September of 2009, during the disappearance of Cobra Commander, Destro laid claim on Cobra Island, attempting to annex it to Trans-Carpathia. This was welcomed by the US government as a step towards normalizing relations with the Island.

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