Banks that use third parties to carry out their customer due diligence work still bear responsibility for managing their anti-money laundering and counter-terrorism financing risks. The Basel Committee on Banking Supervision has issued a reminder to banks that a customer dealing with an agent of the bank is legally dealing with the bank itself in updated guidance on the sound management of AML/CTF risks.Most of the guidance is a recapitulation of standards set by the Financial Action Task Force, which form the basis of Austrac's AML/CTF rules in Australia.However, the report goes into detail on issues related to using a third party to perform customer due diligence.Banks regularly use third parties to perform parts of the due diligence obligations. The BIS says banks need to have clear policies and procedures for dealing with third parties. A third party may be required to certify to the bank that it has implemented its AML/CTF program and that it performs due diligence consistent with the bank's obligations.The bank should periodically review the other entity to ensure that it continues to conduct due diligence in a manner as comprehensive as the bank. The review should include an assessment of the third party's due diligence work.The bank should ensure that the third party maintains confidentiality of customer information.And the bank should document instances that it would consider failures on the part of the third party to perform its duties as contracted.