Contrary to previous news reports, the US Justice Department said it has not considered dropping a high-profile lawsuit against UBS, in which it is trying to get the Swiss bank to hand over the names of 52,000 wealthy US clients accused off offshore tax evasion, media reports said.

Earlier this week, the New York Times said, citing a US official, that a settlement on the case would be reached in July and end efforts by the US authorities to force Swiss banks to erode their historic bank secrecy laws.

UBS’s legal confrontation with the US authorities has played a part in highlighting how countries such as the US, Germany and the UK are trying to force offshore financial centres such as Switzerland to cooperate more fully in rooting out tax evaders. In their defence, such tax havens say their standards of corporate governance and financial reporting are as high, if not higher, than those of many onshore jurisdictions. Some organisations, meanwhile, such as the US Cato Institute, a think tank, have argued that tax havens encourage governments to cut taxes.

However, saying there was “no basis for the report,” Charles Miller, a Justice Department spokesman, reportedly said in the statement: “While the department is always willing to consider settlement in any case, the suggestion that the department is planning to drop this suit is simply untrue. The department is continuing with the case against UBS and will file its brief asking the court to enforce the summons on June 30.”

Swiss finance minister, Hans-Rudolf Merz, was quoted as telling Swiss radio yesterday that UBS and the US authorities were trying to reach a settlement. “I can confirm that efforts are under way,” Mr Merz said from Berlin, according to news agency reports.

UBS argues that disclosing client names would cause it to violate Swiss financial secrecy laws and open its executives to being prosecuted. The Zurich-listed bank has already moved to stop providing offshore banking in the US. In April, UBS issued a worldwide travel ban for its managers of wealthy clients.

In February, the Justice Department sued UBS in a federal court in Miami to force it to turn over names of clients after the bank agreed to pay $780 million to settle accusations that it had defrauded the Internal Revenue Service

Jay Krause, a partner at international law firm Withers LLP, said it is still likely that UBS will reach a settlement with US authorities.

"The smart money is still on a settlement being reached. Linking withdrawal of the suit with implementation of a new treaty, both sides will be able to walk away from the UBS case claiming victory. The summons encourages many non-compliant US taxpayers to come forward as part of the new IRS guidance on voluntary disclosure, but it is far from clear that the US will ultimately prevail in the matter," he said in an emailed statement to WealthBriefing.

"Switzerland has repeatedly said that it will not allow ‘fishing expeditions’ under its treaties. Under the terms of the proposed treaty, the US will be required to make formal requests for information on its taxpayers in Switzerland and those requests will need to identify the taxpayers in question. The US simply doesn’t have the names of every US taxpayer with accounts at UBS, which is why the government is still pressing ahead with the summons. Switzerland may agree to exchange information under the revised treaty, but there will be a high threshold for the US to meet before its requests will be honoured," Mr Krause said.

"Even though the US may not ultimately be successful in obtaining information on all 52,000 UBS accounts under the John Doe summons, President Obama’s proposal to revise the Qualified Intermediary rules would require financial institutions desiring access to US financial markets to turn information about their US clients over to the IRS. Implementing these proposals could effectively give the US access to taxpayer names without going through the John Does summons process and without making requests for information under the revised treaty," he added.

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