Swiss bank UBS said yesterday it would "vigorously" oppose a legal challenge by US authorities seeking to force the bank to reveal the names of American offshore account holders.

"UBS continues vigorously to oppose the enforcement of the summons in these proceedings," the bank said in a statement overnight after US authorities on Tuesday asked a federal court to enforce a summons stemming from a government lawsuit filed earlier this year.

The case could affect up to 52,000 US taxpayers suspected of holding offshore accounts managed by UBS to avoid paying taxes to the US government. According to a bank document filed with the lawsuit, as of the mid-2000s, those secret accounts held about $14.8 billion and the American clients had failed to pay taxes on income earned in those accounts.

The US Justice Department says the Swiss bank "systematically and deliberately" violated US laws, in a memorandum filed in a US District Court in Miami.

Before Tuesday's move, media reports had indicated the US government was prepared to drop the lawsuit in exchange for an out-of-court settlement.

"Reports of a potential settlement are speculative and possible settlement amounts that have recently been reported have no basis," said UBS, reiterating its intention to oppose the summons when the trial opens on July 13.

"Our position remains that the enforcement of the summons would require UBS to violate Swiss law and is inconsistent with treaty frameworks." UBS notably argues that it would be obliged to violate Swiss banking secrecy law by revealing the names of its clients and therefore be liable for prosecution in Switzerland.

US authorities countered that "Swiss law, principles of international comity, and the QI (qualified intermediary) Agreement do not shield US taxpayers from liability, where UBS has systematically and deliberately violated the laws of the US on US soil."

In February, UBS admitted to tax fraud in the US in another case and agreed to pay $780 million under a provisional deal to settle charges that it helped American clients evade US taxes.

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