Switzerland and US reach tentative settlement in UBS tax fraud case

The Swiss and the US governments have decided to settle out of court and have reached a tentative agreement to settle a lawsuit filed in the US court to compel Switzerland's largest bank, UBS to disclose the names of as many as 52,000 Americans who evaded paying tax in the US.

The Justice Department prosecutor Stuart Gibson told a federal judge in Miami yesterday during a conference call, ''The parties have reached an agreement in principle on major issues.'' Regarding the minor issues, he said, ''There are a couple of minor issues that need to get resolved. We expect to be able to resolve them in the coming week.''

On 13 July, the US Department of Justice and Swiss banking major UBS had asked the court to delay the trial, indicating the two governments were nearer to a deal. (See: US delays UBS trial; eyes tax deal with Switzerland)

The judge, cancelling the trial that was scheduled to begin Monday, has now agreed to delay the hearing until 10 August since Gibson said the deal would be finalised by 7 August.

On 19 February, the US justice department had filed a lawsuit in the federal court in Miami to compel Switzerland's largest bank, UBS to disclose the names of as many as 52,000 Americans who evaded paying tax in the US by not disclosing their accounts that held cash and securities in secret accounts in UBS. (See: US justice dept hauls UBS to court to force disclosures)

The US Internal Revenue Service had started a probe against UBS in June 2008 following revelations by a former UBS banker, Bradley Birkenfeld that he helped defraud the IRS by assisting UBS clients in avoiding US reporting requirements on income in Swiss bank accounts.