Abstract: The article is devoted to a comprehensive study of the modern practice by states of the sanctions toolkit of financial diplomacy and an assessment of its political and economic effectiveness. The role of economic sanctions in the system of financial instruments of diplomatic activity of states and their achievement of strategic goals related to accelerating macroeconomic growth and improving the material well-being of the population are defined. Considerable attention is paid to identifying the functional purpose of economic sanctions and revealing their place in the modern regulatory toolkit of international organizations, regional integration groups, and national governments. It has been proven that economic sanctions have been actively implemented in recent decades as one of the means of political pressure on those states that violate the system of international order and threaten the national interests of a significant number of sovereign states. Economic sanctions are also qualified as an important mechanism for states to achieve a number of political and economic goals, de-escalation of global and regional conflicts, as well as deterring countries from aggressive behavior in the international arena. It was found that recent years have been characterized by a significant increase in the attention of researchers to the issue of increasing the effectiveness of the sanctions tools of financial diplomacy used by states. Various trends have been revealed regarding a significant increase in the absolute and relative prevalence of sanctions instruments in the financial diplomacy of countries; diversification of levers and mechanisms used in this field; gradual escalation of the imposition of economic sanctions on individual countries; the scale of their consequences for the aggressor states in terms of capital outflow and the inhibitory effect on the structural dynamics of individual sectors of their national economies. It has been proven that despite the lack of immediate economic effect in the application of financial diplomacy sanctions by countries and their rather high price for private business, in most cases they are a negotiable mechanism for the world community to respond to aggression, as well as a worthy alternative to military methods of resolving various types of conflicts on regional and international levels. A conclusion was made regarding the expediency of applying economic sanctions in a complex of interconnected diplomatic strategic measures. It has been proven that the economization of the classical instruments of diplomatic activity of states determines the expediency of enrichment them by diversified mechanisms of financial diplomacy in order to strengthen countries’ geopolitical and geoeconomic influence on their partners. Special attention in future research should be paid to the introduction of control over the process of implementation of economic sanctions with the use of significant restrictive measures aimed at preventing their circumvention, complicating the search for alternative financial donors and deterring investors from neutral countries.