Live

Watch CBSN Live

U.S., UBS Reach Deal over Secret Accounts

The U.S. government and Swiss banking giant UBS AG have reached an agreement in a case seeking names of some 52,000 suspected American tax evaders with billions in secret Swiss accounts, but details may remain under wraps until next week, officials said.

Lawyers for the government and UBS told a federal judge in a brief conference call they had initialed a deal after a delay last week to settle undisclosed details.

The Internal Revenue Service, which initiated the case against UBS earlier this year, said in a statement the deal "protects the United States government's interests." But the two-sentence statement from IRS Commissioner Doug Shulman added only that more details will be released when the Swiss government signs the agreement as early as next week.

UBS and the Swiss government also welcomed the news and said no terms would be disclosed until it is signed. Swiss Justice Minister Eveline Widmer-Schlumpf said the agreement "is in the interests of both states."

"The deal seems to represent the end of an era - secret banking in Switzerland that allows depositors to hide taxable assets from the U.S. government," said CBS News legal analyst Andrew Cohen. "And you can bet that other depositors in some of those offshore places are now worried that they'll be the next targets-and they probably will be."

The IRS earlier this year asked U.S. District Judge Alan S. Gold in Miami to force Zurich-based UBS to turn over names of some 52,000 American clients believed to be hiding nearly $15 billion in assets in secret accounts.

UBS and the Swiss government had resisted, arguing that to do so would violate Swiss banking confidentiality laws that date back centuries.

If the agreement involves turning over the names, it might "generate a whole new round of litigation by customers of this bank who would argue that the bank breached its contract with them by turning over information to the United States," said Cohen.

"But that argument isn't going to go over well here in federal court and I'm not sure that a foreign court would want to interject itself in this fight."

The Swiss and U.S. governments announced at the end of July they had agreed in principle on major issues but released no details. They had hoped to present a final deal at a hearing Aug. 7, but resolving their differences has taken longer.

At the latest hearing Wednesday, the judge asked Stuart Gibson, the lead Justice Department lawyer in the case, whether an agreement had been reached.

"The answer is 'yes,' your honor," Gibson answered. "The parties have initialed agreements. It will take a little time for the agreements to be signed in final form."

An attorney for UBS, Eugene Stearns, thanked the judge for allowing the case to be brought to what he called a "successful conclusion."

The phone conference lasted less than three minutes.

UBS paid a $780 million penalty earlier this year and turned over names of about 300 American clients in a deferred prosecution agreement with the Justice Department. In that case, UBS admitted helping U.S. citizens evade taxes, which experts say is not a violation of Swiss bank secrecy laws.

So far, three UBS customers whose names were divulged under the prior agreement have pleaded guilty to tax charges in federal court. Hundreds of others holders of secret accounts at UBS and other Swiss banks have voluntarily come forward to the IRS under an amnesty program that requires payment of taxes and penalties but generally does not include the threat of prison.

That amnesty program ends Sept. 23.

New York-listed shares in UBS were trading 3.5 percent higher at $15.22.

View CBS News In
CBS News App Open
Chrome Safari Continue