The 1966 sketch with the title "Trois personnages" is estimated to be worth over €450,000 ($457,000). The passenger, who flew in from the Swiss city of Zurich, failed to declare the artwork.
Officials made the discovery on July 5. The passenger said the piece was a copy and provided a receipt of 1,500 Swiss francs (€1,513, $1,533), allegedly for the work.
But officials found another receipt from a Zurich art gallery totaling 450,000 Swiss francs. Art experts who analyzed the artwork said that this was in line with the sketch's market price.
Smuggled artwork determined to be an original Picasso
The search of the passenger's luggage was carried out following a tip-off by Swiss customs officials who informed their Spanish counterparts that the passenger was carrying the work under suspicious circumstances.
Since the passenger denied that they had anything that had to be declared, officials began searching their luggage.
Switzerland is not a part of the EU's non-customs territory and so works of art with a value higher than the legal limit of €150,000 must be declared. The passenger is thus facing charges of smuggling.
The director of the Contemporary Museum of Art of Ibiza supported the customs officials with their investigation into the origin of the sketch, confirming that, based on preliminary analysis, the work is original and the receipt from the Swiss gallery matches the expected market price.
Picasso is considered one of the most influential artists of the 20th century. He was born in Spain but spent much of his life in France where he died at the age of 91 in 1973.