USA Today is reporting that the Justice Department's court case with UBS is encouraging some foreign banks to shed some of the same US clients they used to welcome.

In a move to cover themselves, large international banking conglomerates, including Credit Suisse and HSBC have recently told American clients to close their offshore accounts or transfer them to the banks' U.S. operations, where tax reporting requirements are more strict.

"Overall, the international banking community, and particularly the offshore banking community, has been very friendly to American account holders," said William Sharp, a tax law specialist. "That changed in the past couple of months as a result of the UBS case."

The US courts have granted an adjournment until August in order to encourage a settlement in the UBS case. Prosecutors and attorneys for UBS and the Swiss government are currently negotiating. The Justice Department however complicated matters by releasing a statement on Sunday which said any deal must include information "on a significant number of individuals with UBS accounts."

Owners of HSBC accounts in Jersey, one of the English Channel islands, are getting notices to close accounts. Tax law specialists are reporting similar notices from clients with Credit Suisse accounts.

While at first the other Swiss banks were treating the UBS trial as an opportunity to gain market share, they've been less excited about adding US clients as the trial date got closer.

Apparently, foreign banks in other jurisdiction are getting more skittish about US clients because of reports that the Justice Department plans "to extend this effort to other jurisdictions beyond Switzerland."

HM Revenue and Customs has announced it's upcoming offshore bank account amnesty for the fist of September this year.

Tax-news.com reported that the New Disclosure Opportunity (NDO), not to be confused with the NWO, was announced during the 2009 budget meeting. It is one of the new measures designed to increase tax revenue from the current system. The NDO levies as 10% fine for full disclosure of previously undeclared income connected to an offshore account will be 10%. This, of course, is much lower than it would be otherwise.

The HMRC will launch a national advertising campaign in order to promote awareness of the NDO and avoid concerns of a repeat of the previous offshore bank accountdisclosure scheme two years ago, which was poorly understood.

Although the last Offshore Disclosure Facility (ODF), ran in 2007, gave the government an additional 400M pounds sterling of tax, this year's NDO has targeted 2 Billion pounds.

John Cassidy, a Tax Investigations Partner at PKF Accountants says the 20-year time limit applied to the 2007 campaign deterred many offshore account holders from disclosing income.

Normally, the period for which individuals are asked to settle tax arrears is six years. However, Cassidy points out that the corollary to this is that, in most cases the rate of penalty charged on the tax paid late is likely to be higher than the 10% rate on offer through the NDO.

“The maximum period for the NDO should be kept short – set at ten years or less – to sweeten the offer for offshore account holders and provide a real incentive for them to come clean,” Cassidy argued.

We will continue to watch these developments within the UK and HMRC.

U.S. and Switzerland and UBS AG are in negotiations to settle a major tax-evasion case that could require the Swiss bank to reveal some of the over 50k or so identitiesof account holders.

Earlier this year, UBS agreed to disclose some 250 account names. This is the latest in a long-running investigation that is trying to destroy Switzerland's strict banking secrecy. This is a breaking story. Look here for more as this story breaks.