(dissenting):
I would affirm Judge Ward’s decision finding subject matter jurisdiction under the Foreign Sovereign Immunities Act but dismissing the action for lack of personal jurisdiction.
We have noted on a previous occasion that a determination of “direct effects” sufficient to sustain subject matter jurisdiction under the exception to immunity codified in 28 U.S.C. § 1605(a)(2) “is an enterprise fraught with artifice.” Texas Trading & Milling Corp., 647 F.2d 300, 312 (2d Cir.1981), cert. denied, 454 U.S. 1148, 102 S.Ct. 1012, 71 L.Ed.2d 301 (1982). We have ruled since in a number of instances involving the repudiation of debts payable in the United States. This is the first case, however, involving a direct transfer of funds into the United States. In my view, the payments of over $221,000 by Royal Bank of Canada into Rafidain’s New York ac*13count at Irving Trust at the direction of Rafidain constitute a “direct effect in the United States.”
Rafidain, a bank wholly owned by the government of Iraq, maintains a “correspondent” bank account with the Irving Trust Company in New York City as a means of “expedit[ing] the international transfer of funds, principally in United States dollars.” 1 It is inconceivable that the receipt of payment by Irving Trust did not have a direct effect on it as a financial institution and, arguably, on New York as “the international clearing center for United States dollars.” Allied Bank Int’l v. Banco Credito Agricola de Cartago, 757 F.2d 516, 521 (2d Cir.1985), cert. dismissed, 473 U.S. 934, 106 S.Ct. 30, 87 L.Ed.2d 706 (1985). At a minimum, the receipt of funds had a direct effect on the New York bank’s ability to make payments and transfer funds on Rafidain’s behalf, without posing some risk to its own economic well-being.
While the maintenance of a United States correspondent bank account and receipt of payment into that account may not constitute sufficient contacts with a forum to confer personal jurisdiction or to provide the basis for utilizing our laws in a dispute, they provide a sufficient nexus to the United States to support an assertion of subject matter jurisdiction over a related controversy.
Furthermore, I have difficulty reconciling the result reached by the majority with the emerging trend in the district courts to find that nonpayment of a debt payable in the United States between foreigners causes a direct effect in the United States. See, e.g., L’Europeenne de Banque v. La Republica de Venezuela, 700 F.Supp. 114 (S.D.N.Y.1988) (nonpayment of a debt payable in the United States by a foreigner to a foreigner causes a direct effect in the United States); Jerushan Corp. v. Banco Mexico Somex, S.A., No. 83 Civ. 2431, 1986 WL 1795 (S.D.N.Y. Feb. 6, 1986) (LEXIS, Genfed library, Dist. file) (nonpayment of certificates of deposit issued by Mexican bank to Mexican citizens had direct effect in the United States, “[e]ven if the contractual language is construed to require plaintiffs to obtain payment in Mexico.”); Italian International Bank v. Banco Industrial de Venezuela C.A., No. 80 Civ. 5288, 1984 WL 438 (S.D.N.Y. June 6, 1984) (WESTLAW, DCT Database) (nonpayment of certificate of deposit payable in the United States between foreign banks had direct effect in the United States). If nonpayment between alien entities has a direct effect here, then surely it follows that payment does too.
The majority appears to accept Rafi-dain’s argument that these recent cases are distinguishable because they involve a United States branch or agency office or a contract payable in the United States. In my view, these distinctions have not been determinative but indicate that absent payment, some other connection with the United States is necessary. In the typical breach of deposit case, the role of the branch or agency was merely to accept deposits passively, essentially the same function performed by Irving Trust in the instant “receipt of payments” case. But cf., Italian International, No. 80 Civ. 5288 (“[A] most important factor here is the substantial role played by [the foreign bank’s] New York agency in connection with the transaction sued on.”). While the written contract between IHL and Rafidain did not provide for payment in dollars in the United States, the contract proved equally “payable in the United States” when Royal Bank complied with Rafidain’s demands that it credit its account at Irving Trust.
While I am mindful that allowing jurisdiction whenever credits are directed through American banks might cause foreign states to divert business from the United States to banks in foreign lands, Verlinden B.V. v. Central Bank of Nigeria, 488 F.Supp. 1284, 1298 (S.D.N.Y.1980), aff'd on other grounds, 647 F.2d 320 (1981), rev’d on other grounds, 461 U.S. 480, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983), I believe this policy concern is better addressed in the context of personal jurisdiction. In Texas Trading, we identified as *14one factor in determining minimum contacts for purposes of personal jurisdiction “the countervailing interest of the United States in hearing the suit.” 647 F.2d at 314.
I agree with Judge Ward, 712 F.Supp. 1112 (S.D.N.Y.1898), for the reasons set forth in his opinion.
. Affidavit of Charles J. Dugan, Vice-President and lending officer of Irving Trust.