Can the confirming bank refuse to accept and pay against a Letter of Credit with a discrepancy even if the Issuing Bank and the Buyer have agreed to waive the discrepancy?

Answer: Sure. It is unusual but not unprecedented. If the Confirming Bank believes, for whatever reason, that it will not be paid by the Issuing Bank it would be in the Confirming Bank’s best interest not to agree to the requested discrepancy waiver.

Here is a follow up: Does the bank have a fixed number of days in which to report back that a discrepancy was found in our supporting documentation?

Answer: Yes, they must report the discrepancy within seven days of receiving the supporting documentation.