I suggest you consider all the provisions of the basic law, but particularly Article 7 and its specific reference to Article 4(1)(c)....
Justiciar, I can only think that you are confusing Annex III of two different regulations. You refer to Article 7 of the Basic Regulation, which states
"Pilots involved in the operation of aircraft referred to in Article 4(1)(b) and (c), as well as flight simulation training devices, persons and organisations involved in the training, testing, checking or medical assessment of these pilots, shall comply with the relevant ‘essential requirements’ laid down in Annex III." This reference is to Annex III of the
Basic Regulation (Essential requirements for pilot licensing referred to in Article 7) and
not to Annex III of the Implementing Regulation (Requirements for the acceptance of licences issued by or on behalf of third countries).
The fact is that, as currently drafted, Article 3 of the Implementing Regulation clearly requires pilots of third country aircraft used into, within or out of the Community by an operator established or residing in the Community to be licensed in accordance with Part FCL. In order to achieve this, Member States may accept (i.e. validate or convert) third country licences, including any associated ratings, certificates, authorisations and/or qualifications and medical certificates issued by or on behalf of third countries, in accordance with the provisions of Annex III
to the Implementing Regulation.