After receiving the documents from the designated bank, confirming bank or beneficiary, the issuing bank shall complete the document review within 7 banking days and make a decision on whether to pay the amount of the letter of credit before the end of the 7th working day. If the documents are qualified, the issuing bank shall make payment arrangements with the beneficiary or arrange reimbursement with the remitting bank. If the letter of credit stipulates that a reimbursing bank is to be reimbursed by another reimbursing bank, the issuing bank shall issue a reimbursement instruction or authorization to the reimbursing bank in advance, stating the letter of credit number, date of issuance and amount of the letter of credit, and stating whether the reimbursing bank’s fees shall be paid by the issuing bank or charged to the claiming bank. If the fees are stipulated to be charged to the claiming bank, but the reimbursing bank fails to receive the fees, the issuing bank is still responsible for compensation. If the reimbursing bank fails to reimburse the claiming bank on its first claim, the issuing bank shall still reimburse the claiming bank with principal and interest, unless the issuing bank points out that there are discrepancies in the documents and refuses to pay.
If the issuing bank finds discrepancies when reviewing the documents, it can decide whether to contact the applicant to ask the applicant to waive the discrepancies or ask the applicant to authorize the issuing bank to make external payments. However, this contact should be completed within 7 working days after the bank receives the documents. The issuing bank cannot violate the reasonable time limit for reviewing the documents on the grounds that it is asking the applicant to waive the discrepancies. In other words, if the applicant has not responded by the end of the 7th working day that the applicant has waived the discrepancies and agreed to pay, the issuing bank must refuse to pay.