The sensitive case pitting US authorities intent on cracking down on tax evaders and Switzerland's cherished banking tradition has been settled, according to lawyers for UBS, the Swiss government and the United States. The accord ends weeks of tough negotiations on both sides.

"The parties have initialed agreements," US Justice Department lawyer Stuart Gibson told a conference call with the judge overseeing the matter, which was open to the news media. "It will take a little time for the agreements to be signed in final form."

He added that the parties involved had asked the court to cancel a trial hearing on Aug. 17 and that the parties would submit a petition for the case's dismissal. He said he hoped the accord could be finalized by Aug. 7, although he did not provide further details of the deal.

Eugene Stearns, a lawyer for UBS, thanked Judge Alan Gold for his handling of the case and said it would "allow a very difficult matter to be brought to a successful conclusion."

Diplomatic spat

UBS, the world's largest private bank has, along with the Swiss government, been fighting US efforts to get the names of 52,000 American UBS clients who are suspected of offshore tax evasion.

UBS had fiercely fought against disclosing the names and the Swiss government stepped in saying doing so would violate Swiss law. Bern had said it would block UBS from turning over the names if the bank were ordered to do so. In turn, the US Justice Department said it might indict the bank if it refused the request.

The seven members of the Swiss Federal Council interrupted their summer vacations on Monday to hold a special meeting on the case.

In February, UBS agreed to pay $780 million (550 million euros) to settle charges that it helped wealthy Americans hide an estimated $20 billion from tax authorities. One day later the US Justice Department filed a civil suit seeking the disclosure of the 52,000 client names.

Of those, prosecutors are now focused on several thousand Americans with offshore accounts.

jam/Reuters/AFP/AP
Editor: Nancy Isenson