I have a foreign person, under 55, who has contributed to his 401k, is now vested with more than $5,000 in the account. He is returning to his country and wants to cash out. Does he have to pay penalties, etc?

I would say yes, since the money was earned in the US and subject to US taxes and since 401K accounts are regulated under US legislation, then withdrawal penalties would still apply.

Yes, thanks!