“He was detained for three hours. He owns the watch. None of the people I know and sat next to on our commercial flight filled out a declaration form, including Arnold — he got to customs, and they told him he was ‘randomly’ selected to be searched,” Ketchell said. “During the search, he answered every single question the customs officer asked, so to say he didn’t declare anything is 100 percent false.”

Munich customs spokesman Thomas Meister said tax should have been paid on the watch because Schwarzenegger was intending to sell it in the European Union. The watch, custom-made for Schwarzenegger by Swiss luxury brand Audemars Piguet, is likely to be auctioned at a fundraising dinner for Schwarzenegger’s climate initiative in Kitzbuehel, Austria, on Thursday.

A photo published by German daily Bild showed Schwarzenegger holding the watch box as customs officers sat in the background at a computer.

“All is well now, and we look forward to a successful charity event for the Schwarzenegger Climate Initiative tomorrow,” Ketchell said.

It’s unclear what legal consequences, if any, the Terminator star could face, but it’s possible that the investigation could result in a fine or court appearance.

“Lawyers are dealing with it,” Ketchell said. “We don’t expect any issues because Arnold always pays his taxes.”