Foreign investment in the U.S. real estate market has been increasing for some time. That brings many benefits. It can also pose unanticipated compliance challenges for U.S. mortgage professionals working on transactions involving foreign investment. A recent case brings these risks into sharp focus.

On September 6, 2018, a federal judge sentenced a real estate broker to six months in prison for attempting to bribe a Middle Eastern official who purportedly controlled investment decisions at a Qatari sovereign wealth fund. The broker allegedly tried to get the official to direct an investment to a large real estate project overseas. The broker’s alleged conduct violated the Foreign Corrupt Practices Act (FCPA), which prohibits any U.S. company or person (broadly defined) from giving anything of value to any foreign official (also broadly defined) to obtain or retain any business (likewise broadly defined).

Given how broadly the FCPA applies and the expansive definition of “foreign official,” mortgage professionals working on deals potentially involving foreign investment would be wise to seek compliance advice early. For example, if a U.S. company works on a deal with a foreign investment banker who also happens to be a government minister, something as seemingly innocuous as taking said investment banker out to dinner could violate the FCPA. While this would not constitute a “slam dunk” case for prosecutors, it could introduce risk that might otherwise be mitigated with early attention to compliance.