A Senate committee has recommended amendments to anti-money laundering and counter-terrorism financing legislation to allow financial institutions to use third parties for customer identification and verification.The Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 was introduced into the Parliament last October and referred to the Senate Legal and Constitutional Affairs Legislation Committee in November.The committee recommends passage of the amendment bill without changes.The bill includes a number of measures designed to strengthen Australia's anti-money laundering and counter-terrorism financing arrangements.It would allow financial institutions and other anti-money laundering reporting entities to enter into customer due diligence arrangements with other regulated businesses in Australia and overseas, allowing them to rely on customer identification and verification procedures undertaken by a third party.Under current arrangements, if a person has bank accounts with multiple lenders it is expected that each financial institution will have undertaken customer due diligence procedures on that person. This would no longer be necessary.The reform would give reporting entities a "safe harbour" from liability for third party customer due diligence breaches.The committee said there was general support for this change, with submissions saying it would make information sharing more efficient and reduce the identification and verification burden on customers.There are a number of other changes in the bill. It prohibits reporting entities from providing a designated service if customer identification procedures cannot be performed.It strengthens protections around correspondent banking by prohibiting financial institutions from entering into a correspondent banking relationship with another financial institutions that permits its accounts to be used by a shell bank.And it requires banks to conduct due diligence before entering a correspondent banking relationship.The bill also provides for a simplified and more flexible framework for the use and disclosure of financial intelligence to better align with existing operational practice.It expands exceptions to the prohibition on tipping-off to permit reporting entities to share suspicious matter reports and related information with external auditors.The bill expands the rule-making powers of the Austrac chief executive.The Office of the Australian Information Commissioner raised concerns in its submission about privacy. The committee said it was satisfied that there were privacy safeguards in place to ensure officials accessing and sharing Austrac information are obliged to comply with the Australian Privacy Principles.Additional comments by Greens members of the committee said the government needed to move on plans to include real estate agents, lawyers and accountants as designated services under AML/CTF legislation.