Two Men Accused of Smuggling Luxury Watches and VAT Fraud Totaling BD309,755 Face Trial in Bahrain

TDT | Manama

Email: mail@newsofbahrain.com

The First High Criminal Court has begun hearing the case of two Asian men, aged 35 and 40, accused of attempting to smuggle four luxury watches that were skillfully concealed to avoid detection.

The pair are also charged with unlawfully reclaiming value-added tax (VAT) refunds totaling BD309,755 through 182 fraudulent transactions. During the hearing, the two defendants appeared in court and denied the charges. The court scheduled the next session for November 2 to hear the defense’s arguments.

According to the Financial Crimes and Money Laundering Prosecution, the Tax Evasion Crimes Unit received a report from the National Financial Intelligence Centre. The centre had been notified by Customs Affairs about the defendants’ attempt to leave Bahrain with undeclared high-end watches concealed in a sophisticated manner to avoid seizure by customs officers.

Investigations revealed that customs officers at Bahrain International Airport became suspicious of the two men during routine screening. When asked if they were carrying any funds or valuables to declare, both denied having any. However, a search led to the discovery of four expensive watches carefully concealed to evade detection.

The defendants later claimed that they were engaged in an economic activity involving the purchase of luxury watches in Bahrain for resale abroad. The National Bureau for Revenue (NBR) was contacted to verify whether the defendants had conducted VAT refund operations. Findings revealed that both had indeed submitted 182 refund claims— all obtained illegally, as their business activities made them ineligible for VAT refunds intended exclusively for tourists.

Further inquiries confirmed that the first defendant had filed 57 refund claims amounting to BD102,711.822, while the second defendant had submitted 125 refund claims worth BD207,044.066. Evidence included invoices, photographs of the items, and documentation from the NBR proving that the refunds were claimed under false pretenses.

One of the defendants told investigators that he resided in a Gulf country and, due to financial difficulties, began acting as a middleman between watch sellers and buyers, earning commissions of AED1,000 to AED2,000 per deal. He said he met the co-defendant and agreed to purchase and transport watches from Bahrain, concealing them by wearing long clothing to avoid inspection.

The Public Prosecution charged both men with tax evasion by fraudulently reclaiming VAT refunds while knowing they were not entitled to them. They were also charged with failing to declare monetary assets when requested by customs officials, in violation of disclosure regulations at customs checkpoints.