The U.S. Justice Department said on Tuesday it was pressing ahead with its five-month-old lawsuit against UBS AG to force the Swiss bank to identify thousands of U.S. clients with secret UBS accounts.

Despite recent media speculation about a possible settlement of the case, the Justice Department said in a brief filed with a Florida court that it was seeking to enforce tax compliance with the full weight of U.S. law.

The United States has a strong national interest in making sure that all U.S. taxpayers comply with the tax laws, including disclosing their offshore accounts, and paying all the taxes they owe, the department said in the brief.

The U.S. government sued UBS in February in the U.S. Southern District Court of Florida, seeking the names of 52,000 Americans suspected of using the bank to hide nearly $15 billion in assets and evade U.S. taxes.

The United States has proven its case for enforcement. The Court should order UBS to comply in full, the Justice Department said in its filing.

In response, a spokesman for UBS said enforcement of the U.S. summons would require the bank to violate Swiss law and was inconsistent with U.S.-Swiss treaty frameworks.

A court hearing on the U.S. government case against UBS has been scheduled for July 13.

Attorneys and analysts have been skeptical about media reports that the United States would drop the case against UBS without major Swiss concessions, given the international momentum against tax havens and the coming deadlines for errant U.S. taxpayers to come forward voluntarily.

Based on our representation of many UBS cases, it is clear in our minds that the government is going to pursue vigorously its objectives of transparency and limiting tax haven abuse, attorney William Sharp, who represents U.S. clients of UBS, told Reuters by phone.

UBS and the Swiss government have argued that any exchange of confidential banking information should be handled through existing legal treaties rather than in the courts.

But in its court filing on Tuesday, the U.S. Justice Department appeared unrelenting in its bid to use legal tools to pry open Switzerland's jealously guarded tradition of bank secrecy.

VITAL NATIONAL INTEREST

Although Swiss interests in bank secrecy may also be important, the Court must consider those interests in the context of UBS's conduct, where for at least seven years the bank actively helped tens of thousands of Americans break U.S. laws, and evade hundreds of millions of dollars in U.S. taxes, the Justice Department said.

The vital national interest of the United States in fighting attempts by U.S. taxpayers to avoid and evade their tax obligations outweighs the general Swiss interest in maintaining the secrecy of its banking relationships -- especially for those foreign lawbreakers, it added.

A source familiar with the matter told Reuters earlier on Tuesday that American clients of UBS will not be able to access secret accounts starting on Wednesday unless they transfer the money onshore or close the account.

Starting from the beginning of July, U.S. clients will not be able to access information about their accounts unless they tell UBS they either want to transfer the money to a U.S.-regulated entity or to another bank, the source said, confirming an earlier report by Swiss news agency AWP.

In its brief, the Justice Department said that UBS had already acknowledged that its bankers committed very serious crimes on U.S. soil and had therefore subjected the bank to the full jurisdiction of U.S. law.

Swiss banking secrecy is not an impenetrable wall, the document said.

The filing of this brief suggests that if in fact there have been settlement talks, as has been rumored, they obviously have either broken down or are still in progress, said Scott Michel, an attorney with Caplin & Drysale who represents individuals and companies in criminal and civil tax matters.

Michel has been following the case closely since he represents individuals coming forward under a voluntary disclosure program established by U.S. tax authorities.

He said he believed the United States had a stronger case than UBS in the tax evasion dispute.

(Reporting by Tom Brown; Additional reporting by Jim Loney and Pascal Fletcher in Miami, Lisa Jucca in Zurich, Kim Dixon in Washington and Juan Lagorio in New York; Editing by Gary Hill, Toni Reinhold)

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