The civil suit filed by the US Department of Justice on 19 February claims that UBS “engaged in cross-border securities transactions in the US that it knew violated security laws and helped US taxpayers set up dummy offshore companies,” reports the Financial Times (FT).

UBS will “vigorously contest” the case, said the bank in a statement, according to Bloomberg.

“The suit came a day after UBS reached a landmark settlement with the US government in which the Swiss bank admitted having enabled clients to evade taxes, agreed to pay [US]$ 780m (€ 610,7m) in fines and turn over about 250 client names to the US,” notes the FT.

The settlement has “provoked intensive questioning over the future of Switzerland’s famously secretive banking industry as international pressure mounts for more transparency,” continues the article.

Despite Swiss laws guarding bank client confidentiality, Finma, the country’s financial regulator, and the Swiss government have said that: “they had no choice but to let UBS hand over some names data to avoid a criminal case which could have threatened the bank's existence and hurt the Swiss economy, heavily dependent on the banking industry,” reports Reuters.

“Banking secrecy, ladies and gentleman, remains intact,” said Swiss President Hans-Rudolf Merz at a news conference (LA Times).

The Associated Press(AP) reports that Merz, UBS and Switzerland’s financial regulator have all asserted that the handover is not “a retreat from the principle of banking secrecy because it concerns only a small number of files that are linked to tax fraud – and not tax evasion.”

“Under a 75-year-old law, Swiss banking secrecy can only be lifted when individuals are deemed to have deliberately defrauded tax authorities as opposed to failing to declare all assets, a distinction only Switzerland and other tax havens make,” explains the article.

However, some experts say that the settlement has “opened cracks in Switzerland's famous bank secrecy laws,” according to Reuters.

“Germany, France and Britain want tough action against all offshore tax havens following last year's revelations that hundreds of rich Europeans had been stashing money away in the tiny Alpine principality of Liechtenstein, which has similar banking rules to Switzerland,” writes the AP.

“Nearly a third of the wealth that is stashed in tax havens around the world is in Swiss banks -- an estimated [US] $2.2 trillion [€1,7 trillion],” reports Reuters.