Russia has set out proposals for a unified depository and clearance system for BRICS countries, as it seeks to persuade member nations to deepen financial cooperation without the involvement of the West.

President Vladimir Putin is hosting the first summit since BRICS expanded to nine members in January, with the United Arab Emirates, Iran, Egypt and Ethiopia joining Brazil, Russia, India, China and South Africa in the organization. He said Wednesday that the group’s development showed that a “multipolar world” is emerging, in a challenge to the existing US-dominated global order.

While it’s technically feasible, there’s little sign most BRICS members beyond sanctioned Russia and Iran are interested in joining a common depository, said Oleg Vyugin, a former top Bank of Russia official.

Russia has a clear interest in developing alternative financial structures to bypass unprecedented sanctions imposed by the US and its Group of Seven allies after Putin ordered the February 2022 full-scale invasion of Ukraine.

Alternative payment systems “may not provide the immunity from sanctions that is anticipated,” said Tom Keatinge, director of the Centre for Finance and Security at the Royal United Services Institute in London. “With the US — and increasingly the UK and EU — developing sanctions and export control mechanisms that have extraterritorial reach, Western sanctions could still have an impact.”

Officials from central banks of BRICS states next plan to discuss the unified payment system in December, according to the person familiar.

While the process is challenging and slow, as individual countries have different technological and security protocols as well as laws and financial regulations, a partially integrated payment system is a possibility and could boost trade between BRICS members by 5%-7%, the person said.

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