From Watches of Espionage (former CIA Case Officer/amateur horologist):
Watches as Tools of Money Laundering and Illicit Finance
Luxury timepieces are one of the most effective mediums to move illicit funds around the globe and a tool to integrate those ill-gotten gains into the financial system. Transnational criminal networks, terrorists, narcotraffickers and corrupt politicians have used watches to launder money as a part of global illicit finance.
The Weight of a Million Dollars – 22 pounds
A million dollars weighs just over 22 lbs. I learned this during one of my first tours as a CIA Case Officer. Like any other morning, I mounted my Gary Fisher mountain bike and rode out the gate of our compound for a quick exercise ride in the hills surrounding the African capital where I was working. This activity was “in pattern,” should I have surveillance, they would note the departure, but it would not warrant further investigation. A trained eye might have seen that something was different, however. The dead weight of ten thousand $100 bills in my backpack made the bike top-heavy and awkward to ride.
The operation was simple and routine. After a long Surveillance Detection Route (SDR) through the hills and side streets of the third world capital, I worked my way to a predetermined ops site. The watch on my wrist would have (probably) been a Timex Ironman, my go to Digital Tool Watch (DTW) for exercise over the past two decades. I would have checked the time before moving into the site, confirming that I would hit the operational window. In espionage, timing is everything.
Right on time. I identified a couple in the alley. We established bona fides with a verbal parole -- a predetermined phrase and response. I then handed them the heavy backpack in exchange for a similar one and rode off in the other direction, the entire exchange lasting less than a minute. In tradecraft lingo it was a “BE” (Brief Encounter).
A standard CIA Case Officers EDC, read more HERE
Except for the backpack stuffed with cash, it was a routine day for a case officer. Certainly not the stuff of Hollywood but instead a crucial operation for the global network of intelligence collection. Due to compartmentalization, I didn’t know who the individuals were that I handed the backpack to or why they needed the large sum of cash, though I have my suspicions. They had likely just arrived in the country and could not bring the cash in through customs without drawing scrutiny.
Watches as a Currency:
One takeaway from this operation is that money is heavy. It’s inconvenient, bulky and difficult to transport, not to mention having to explain it away if discovered. This is why many illicit actors, spies and criminal networks rely on expensive but innocuous luxury items to move funds across borders. Given the significant increase in value of timepieces, watches are a favored currency when it comes to illicit activity. I easily could have handed off a single watch to transfer that same value to the couple that morning.
The value-to-weight ratio of a Rolex, Patek Philippe, Audemars Piguet or other premium brands is exceeded only by precious gems, making it easy to physically transport a watch across international borders. The vast, unregulated, and fragmented gray market makes converting timepieces into cash relatively easy. Unlike vehicles, gold, and diamonds, there is no oversight or registration for timepieces and a million dollar Patek can be worn on your wrist, easily breezing through customs.
Luxury Watches – Money Laundering:
The international financial system is heavily regulated and monitored by law enforcement and intelligence services to identify illicit activity. Transactions over $10,000 are automatically flagged and international border law restricts the amount of cash one can bring in/out of a given country undeclared.
By contrast, watches are a perfect medium for exploitation by bad actors. They are innocuous and liquid, and pawn shops, auction houses and high-end dealers often turn a blind eye to these activities. Every major auction house has been involved in a controversy where profitability triumphed over ethics at some point. This isn’t to say that they’re willfully supporting money laundering, rather that it is simply a frequent occurrence....
....MUCH MORE
Also at WoE:
Iran Under Fire: The Watches of Operation Epic Fury
My interest was piqued by a friend who mentioned that gold in Dubai was selling at a discount because the traders couldn't get it to their buyers with most air and sea routes closed. This brought to mind the old-time smugglers who used jewels, particularly diamonds, as their preferred high value/low volume object of affection. Some aristos fleeing to friendlier climes used rare stamps or collectable coins to embody their wealth. But it was Dubai that led to Watches of Espionage.
There are a lot of watches for sale in the Emirates and Dubai is at the center of the action.
Legitimate or mostly legitimate Swiss creations get to Dubai and are transformed into semi-legitimate of illegitimate objects of desire when they are bought with cash or crypto
The now deregulated watches move to Miami, home of more than one crypto billionaire who wishes to, ah, diversify his/her holdings and/or the old school Latin American money launderers or a discrete representative of a Bahamian or other offshore financial institution.
From there the highest high-end timepieces might go to one of the auction houses to complete the laundering process while the $50,000 clocks can make their way to individual collectors or to luxury boutiques of all sorts: "Has Madame considered how a Piaget would look on her wrist when wearing this gown?"
The Swiss say they are making attempts to stymie the grey market/black market while at the same time sponsoring watch fairs around the world, providing the ocean in which the money launderers and smugglers swim.
That's what I thought of when I heard gold was selling at a discount in Dubai.
