Reading in 7z formatted files.
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7Zip support was added in FME 2018.1 and all current versions will have support as well. Please check out Reading from Archive Files here for more information: https://docs.safe.com/fme/html/FME_Desktop_Documentation/FME_Workbench/Workbench/archive_files_reading.htm
If you are selecting the 7zip file from a folder after you have selected the format, you might need to change the extension filter to 'Archive Files' to be able to pick a file with the 7zip extension.