U.S. soon to end tax case against UBS

The U.S. government agreed last August to drop tax-evasion charges against UBS after Switzerland promised it would transfer the details of around 4,450 clients that UBS had helped to dodge taxes. The transfer lifted the veil on Switzerland's cherished tradition of banking secrecy.

Swiss tax authorities had examined the clients' accounts by Thursday's deadline, and talks were being held with the United States over the final handover of information, the Swiss Finance Ministry said on Thursday.

Washington sought to obtain the names through a so-called John Doe summons, which describes the types of clients at the bank based on their actions but without specific names. A tax U.S. official said on Thursday the U.S. government has received 2,000 accounts so far.

Based on information received to date and assurances by the Swiss government, we anticipate being in a position to withdraw the John Doe summons this fall, Internal Revenue Service spokesman Bruce Friedland said in a statement.

UBS, in a statement, said it was pleased to learn the Swiss authorities would transfer the names and meet terms of the U.S. agreement.

UBS expects that implementation of the treaty will be completed in the coming weeks, although the exact date of completion is not yet defined, UBS said.

Given the progress made so far in implementing the agreements between all parties involved, UBS remains confident that a final resolution of the U.S. case will be achieved in October.

The deal has hung in the balance until Switzerland's parliament gave its support in June and ruled out a referendum on the issue. That approval removed the last obstacle to UBS Chief Executive Oswald Gruebel's quest to revive the fortunes of the bank.

Gruebel had been hauled out of retirement by the bank after it was bailed out by the Swiss government.

UBS's wealthy clients left in droves, with the threat of renewed legal action looming if Switzerland failed to deliver on its promises to release the account names within a year of the U.S. deal being struck.

Gruebel has assured investors that client cash should stop bleeding from UBS by the end of 2010, solving the bank's final problem after it reported a second-quarter profit of 2 billion Swiss francs ($1.9 billion) -- its third straight quarterly profit under Gruebel following two years of heavy losses amid the financial crisis.

Switzerland's banks should not run into further trouble with the U.S. taxman now that the damaging dispute with UBS has been cleared up, Switzerland's top tax diplomat, Michael Ambuehl, said earlier this month.

$1 = 1.025 Swiss francs

(Reporting by Jason Rhodes and Kim Dixon; Additional reporting by Joe Giannone in New York; Editing by Will Waterman and Matthew Lewis)