Swiss bank UBS is to hand over details of 4,450 accounts to the US authorities in order to settle a legal action sparked by a dispute over suspected tax evasion. The Swiss government made the announcement this afternoon after signing a deal with the US.
In return, US authorities are to abandon their lawsuit against UBS in the US. The US was looking to identify 52,000 of the bank's US account holders as it wanted information on thousands of Americans suspected of evading US taxes.
Switzerland has now agreed 'to deal within one year with a new request for administrative assistance relating to some 4,450 accounts,' the Swiss government said.
Earlier, the Wall Street Journal reported that a fine against UBS, which paid $780m earlier this year to settle a tax crime probe, was not part of the settlement.
The US Justice Department and Internal Revenue Service said that, under the agreement, the Swiss government had also agreed to review and process more requests for information from other banks about their account holders 'to the extent that such a request is based on a pattern of facts and circumstances equivalent to those of the UBS case'.
Swiss cabinet's special meeting on case
The settlement stemmed from a US government lawsuit filed earlier this year seeking to force the Swiss bank to identify Americans holding offshore bank accounts to evade taxes. The case could have affected as many as 52,000 Americans who held UBS accounts.
UBS had argued that it could not comply with the US demand without violating Swiss banking secrecy law, which would make it liable for prosecution in Switzerland.
The Swiss government interrupted its summer holidays earlier this month to hold a special meeting over the case. The seven members of the Swiss Federal Council or cabinet were meant to return from holidays only this week.
An agreement in principle had been announced on July 31, but reaching a final deal took more time than expected.
US authorities had been asking the courts to order UBS to reveal the names of American offshore account holders, saying the Swiss bank 'systmatically and deliberately' violated American laws in promoting offshore accounts.
