As a current or prospective holder of a security clearance, your personal and financial affairs are subject to heightened scrutiny, particularly in relation to those involving foreign countries. One area that often raises questions is the ownership or acquisition of foreign property or financial assets.
While such ownership can trigger concerns under Adjudicative Guidelines B (Foreign Influence) and C (Foreign Preference) of Security Executive Agent Directive 4 (SEAD 4), it is not inherently disqualifying. Clearance decisions are made based on the totality of circumstances, with successful outcomes frequently hinging on full disclosure, and mitigating factors such as the nature and location of the foreign asset, as well as whether it was inherited or actively acquired.
Numerous Defense Office of Hearings and Appeals (DOHA) cases have demonstrated that individuals with foreign property or financial interests can still obtain or retain clearances, provided they can demonstrate loyalty to the United States and that foreign assets do not present undue risk.
Adjudicative Guidelines for Foreign Property and Asset Issues
Guideline B (Foreign Influence) and Guideline C (Foreign Preference) of SEAD 4 are the most relevant when foreign assets are involved.
Guideline B focuses on whether an individual’s foreign contacts or interests could create a potential conflict of interest or expose them to coercion, exploitation, or undue influence by a foreign entity. It defines serious foreign influence to include a substantial financial interest in a country, or in any foreign-owned or operated business that could make the individual vulnerable to foreign influence.
Guideline C addresses concerns related to dual loyalties or foreign preference. It may be triggered when an applicant maintains significant, ongoing ties to another country, that could call into question their exclusive allegiance to the United States. Of the two, Guideline B is the most relevant in foreign asset cases, but Guideline C can come into play.
Disclosure is Mandatory
Applicants for security clearance are required to disclose all foreign financial interests on the SF-86 (Questionnaire for National Security Positions) or the electronic version, eAPP. Full and accurate disclosure of foreign property, including its location, value, method of financing, and how it was acquired is essential.
To strengthen one’s security clearance chances, individuals should be transparent and proactive, providing supporting information that demonstrates mitigating factors which are indicators of strong ties to the U.S. (e.g., significant property or assets in the United States). Failure to disclose foreign property can result in immediate clearance denial or revocation, not necessarily because of the asset itself, but due to concerns about candor, honesty, and overall trustworthiness, which are central to the adjudicative process.
DOHA Cases
To illustrate how foreign property cases are evaluated by clearance adjudicators, here are two examples from the Defense Office of Hearings and Appeals (DOHA)
- ISCR Case No. 24-00750 (Feb. 24, 2025) (Applicant’s security clearance initially granted under Guideline B where he sought to inherit a $350,000 property in Hong Kong, China, but later denied on appeal in 2025 DOHA LEXIS 47 on the grounds that the majority of Applicant’s assets were located in Hong Kong versus the United States due to the amount of his potential inheritance versus his assets in the United States).
- ISCR Case No. 23-01677 (July 2, 2024) (Applicant’s security clearance was granted in a case where his share of a house in Taiwan in the amount of $300,000 was outweighed by his significant assets ($900,000 house and retirement portfolio) in the United States, among other factors).
Best Practices for Clearance Holders and Applicants
If you currently hold or are considering acquiring foreign assets or property, take the following steps to protect your security clearance eligibility:
- Disclose all foreign assets fully in your security paperwork, even if you are unsure whether an asset requires reporting.
- Consider divesting high-risk foreign holdings, particularly in countries deemed adversarial to U.S. interests.
- Consult with a security clearance attorney early in the process to understand your obligations and risks.
- Maintain clear records of how and why the asset was acquired and how it is managed.
- Make a list of all of your assets located in the United States (properties, bank accounts, retirement accounts, etc.).
Successful Mitigation of Security Risks Involving Assets or Property
If foreign asset ownership arises as a concern during your security clearance adjudication, mitigation is possible. Experienced legal counsel can help accurately present your case, emphasize your loyalty to the United States, and distinguish between benign foreign interests and those that may pose genuine security risks.
Successful mitigation often hinges on demonstrating strong U.S. ties and providing context for foreign assets, such as whether they were inherited, actively acquired, or recently obtained. It is essential to fully disclose all foreign property details, including location, value, financing, and acquisition details. To strengthen your application and clearance eligibility gather mitigating evidence such as clear explanations regarding the nature of any foreign property, whether inherited, an investment, or otherwise.
In many cases, a clearance decision involving foreign assets will come down to three factors: (1) What country are the assets in? (the more adverse to the United States the harder it is to obtain a clearance); (2) How much is the foreign asset(s) worth?; (3) Can you show that you have more assets in the United States than you do in the foreign country involved?
FINAL THOUGHTS
Foreign property and assets in the context of holding or obtaining a security clearance can be complicated. Early consultation with a security clearance attorney can help you understand your reporting obligations, and assist you in mitigating government security concerns about any foreign assets that you may own.
This article is intended as general information only and should not be construed as legal advice. Although the information is believed to be accurate as of the publication date, no guarantee or warranty is offered or implied. Laws, regulations, and government policies are always subject to change, and the information provided herein may not provide a complete or current analysis of the topic or other pertinent considerations. Consult an attorney regarding your specific situation.
