747JJ is right on the ball.
747JJ is correct in all aspect.
However do not forget that it up to the country in this case Iceland or Latvia to issue validations or not. If they are braking any EU rules I do not know. I have heard with EASA that the issuing of validations should end next year. I do know pilots who just had their validations renewed for 1 year i.e. until october 2010. The Icelandic pilot union had tihis case presented to EFTA and the Icelandic official there kept loosing the paperwork and asking for more until the case died in their hands. Also the icelandic ministry of employment has been told to answer the issue by the Ombudsman for the Parliament.
The ministry keeps ignoring it. This is an Icelandic inhouse problem due to corruption in the goverment. However do not forget that the canadians opened up temporarily to icelandic qualified people (Not pilots though) in the crisis since they need laborers in some fields. It cannot be ignored that in some countries airlines are allowed under certain circumstances to hire people with know how like when airlines are starting new types of fleet or other startups to bring in people on temporary basis. I remember meeting Boeing employees training B747-400 startup for a EU carrier in Luxemboug.
Once the training is done they go home. As I understand this issue was raised with the EALPA and has gone nowhere. Caledonean later Flying Colours and later Thompson hired US pilots in 1999. Australian pilots came to EU after being locked out (Most went to Asian carriers). If the carriers find a loophole they will use it. Like BA is trying to do with AA. If they get away with it is another issue.