The Swiss media have described parliament's acceptance of the UBS-IRS agreement as an important step in ending the sanctity of banking secrecy.

On Thursday, parliament sealed the deal allowing the United States access to confidential UBS data on bank clients suspected of tax evasion.

"Reason has prevailed after all," is how the Neue Zürcher Zeitung (NZZ) put it, saying that Switzerland now has a chance to demonstrate its reliability as a partner for the US.

Fribourg's La Liberté took a far more critical stance in its editorial, saying that Switzerland had bent down like only an invertebrate can do.

It noted that the "holy cow" of banking secrecy had been sacrificed on the altar of the powerful to preserve Switzerland's economic interests.

As a the Geneva-based Le Temps pointed out though, the accord was degrading for some, while necessary for others.

"[That it] allows the details of 4,450 UBS clients to be passed on to the US tax authorities is the disagreeable political price to be paid for a series of mistakes and for a blindness from which the lessons have certainly not all yet been learned."

Painful Past

According to Le Temps, the "conflict of sovereignty would not have occurred ... if Switzerland, its government and the majority of parliamentarians had been able to see at the right time that a broad definition of bank secrecy was less and less acceptable to our partners and that one day it would put us in an untenable position."

"Like many countries, Switzerland has a hard time dealing with the unpleasant sides of its history ... (but) it's much harder for countries with more painful pasts," said Zurich's Tages-Anzeiger.

The newspaper suggested that Switzerland could redeem itself through a commission of truth to examine questions like how could the banking sector offer its foreign clients tax evasion as a key part of its business model? And how could a whole nation moor its identity to such a practice?

The editorial in the Neue Zürcher Zeitung echoed these sentiments: "It's alarming and hard to believe that for years, financial advisers systematically broke American tax law out of pure greed, and that their bosses were not aware of it."

The Tages-Anzeiger predicted that a minority of UBS clients would face criminal charges, and that a few of them might end up in prison. They noted that only 126 clients had attempted to prevent having their data turned over to the US tax authorities.

Satisfaction

On the other side of the Atlantic, US officials declared themselves very satisfied with the outcome.

"It's taken two years, but the action of the Swiss parliament [on Thursday] hopefully means that the United States will finally get the names of more than 4,400 US accountholders suspected of opening Swiss bank accounts to dodge payment of US taxes," said Senator Carl Levin in a statement.

Levin, a Democrat representing Michigan, has devoted considerable time to the issue of offshore tax abuse.

"I hope it also means that the Swiss have decided they will no longer allow bank secrecy to be used to facilitate tax evasion," said Levin.

Meanwhile, IRS Commissioner Douglas Shulman said he expected the Swiss government to act fast in turning over the files on American account holders by the August 19 deadline.

In a statement, Shulman said the American authorities, upon receiving the data, would take immediate action and apply the law very vigorously against those who tried to escape their fiscal responsibilities by hiding their assets abroad.

Criticism

Yet some American non-governmental organisations specialising in financial and state accountability believe that UBS is getting off too lightly.

They say the $780 million fine (SFr866 million) was ridiculously small, considering the sums that are at stake. They also expressed concern that the deal requires UBS to reveal the names of less than a quarter of its American clients.

"Today's news is bittersweet. While the Swiss government will finally be releasing the names, the outcome is far from a fairytale ending for taxpayers," said Stephen Kohn, executive director of the National Whistleblowers Center.

Kohn is also the attorney for Bradley Birkenfeld, whom he describes as "the most important fraud whistleblower in American history resulting in one of the largest collections ever". Yet he says the deal cut with UBS allows most violators to get off scot-free.

"The message from the Birkenfeld case should have been: if you illegally shelter the money you will get caught, if you turn in fraud you will be rewarded. Instead, the message being sent by the Justice Department and UBS is clear: if you get caught your wrist will be mildly slapped, if you turn in the fraud you will go to jail."

Susan Vogel-Misicka, swissinfo.ch (With input from Marie-Christine Bonzom in Washington)