409. If a person determined to be subject to Directives 1, 2, or 3 is a borrower under a short-term facility created after the sanctions effective date, does the facility become prohibited if the SSI entity borrower makes successive short-term borrowings that cumulatively add up to more than the applicable tenor specified in the relevant Directive (e.g., it borrows $100 million with a 10-day maturity, then at the end of the 10 days, the debt “rolls over”)?

Two conditions must be met for short-term facilities created after the sanctions effective date to be permissible. As long as (1) each individual disbursement has a maturity of no longer than the applicable tenor specified in the relevant Directive and the disbursement is paid back in full before the next disbursement, and (2) the lender is not contractually required to roll over the balance for a cumulative period of longer than the applicable tenor specified in the relevant Directive at the borrower’s request (i.e., it has the option to refuse the request for a new short-term loan and terminate the facility), the loan is not prohibited, even though the same borrower may obtain a series of short-term loans from the same lender over a cumulative period exceeding the applicable tenor specified in the relevant directive.

U.S. persons may not deal in a drawdown or disbursement initiated after the sanctions effective date with a repayment term of longer than the applicable authorized tenor if the terms of the drawdown or disbursement are negotiated or re-negotiated on or after the sanctions effective date. Such a newly negotiated drawdown or disbursement would constitute a prohibited extension of credit.