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Swiss and US governments reach agreement in principle

Switzerland and the US reached an agreement on Friday over the long-running tax evasion case between the US government and UBS.

Details of the settlement have not yet been disclosed but US media reports suggest UBS will be forced to reveal the names of thousands of private banking clients, including wealthy families, who hold offshore accounts in Switzerland.

The settlement marks a significant step forward in the case in which the US Department of Justice demanded access to 52,000 American UBS account holders in an attempt to crack down on tax evasion.

At the height of the dispute the Swiss government announced it was considering seizing UBS banking records rather than allowing the US government to access them. According to a Swiss statement in early July, revealing the names would violate Swiss banking law. (Click here to read out coverage of the story)

Details of Friday's agreement will be worked out over the next week but if UBS are forced to hand over the account holders' details it would be a serious blow to Switzerland's banking secrecy.

This is the latest development in an ongoing battle between UBS and the US government. The Department of Justice sued UBS in February, demanding the company handover details of any US taxpayers who hold offshore Swiss accounts.

The order came a day after the Swiss bank agreed to pay $780 million in fees and handover 250 names to the Internal Revenue Service after the bank admitted to helping taxpayers hide money. This was in exchange for UBS avoiding prosecution over their conduct.

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