TORONTO, Dec 16 (Reuters) - Canada proposed new measures

that will help its anti-money laundering regulator impose

stronger penalties for financial crimes after a big national

bank pleaded guilty in the United States for failures in its

compliance program.

In its fiscal update, known as the Fall Economic Statement,

released Monday evenings Canada proposed changes to the Proceeds

of Crime (Money Laundering) and Terrorist Financing Act that

include a 40-fold increase in penalties, criminal offence for

false or incomplete information by a reporting entity and

increase fines for all criminal offences by 10 times.

The proposal also gives the regulator, Financial

Transactions and Reports Analysis Centre of Canada (FINTRAC),

power to coordinate with other federal agencies with financial

sector responsibilities.

The changes come after Canada's No. 2 lender TD Bank in

October was ordered to pay over $3.09 billion in fines after

pleading guilty to violating a federal law aimed at preventing

money laundering.

"The reason for all of these is that Canada is going to be

evaluated by the Financial Action Task Force, in addition to

recent U.S. regulatory environment and the evolving risks of

financial crime," said Alana Scotchmer, a partner at Gowling

WLG.

The Financial Action Task Force (FATF), an intergovernmental

organization whose main objective is to tackle money laundering,

terrorist and proliferation financing, is scheduled to conduct

its assessment in 2025-2026.

During FATF's 2016 review, the team had said Canada requires

improvement in some areas including the lack of coverage in some

areas.

Among the country's big five banks, FINTRAC has fined TD

C$9.2 million, the largest it has ever issued, along with two

other penalties for CIBC and RBC for failure to

submit suspicious transaction reports.

The disparity in the penalties highlights FINTRAC's

approach, which is geared more towards encouraging compliance

over huge penalties and naming entities, experts said.

"It simply is a different setup ... That has the potential

to become problematic with business being so international,

particularly for businesses that have a global footprint,"

Scotchmer said.

The proposal also includes a penalty limit of C$4 million

for individuals and C$20 million for companies in a single

notice of violation.