As a LAME I can say there is a common lack of knowledge about this in the industry, although there are people out there who apply the rule (myself included).
The relevant information is contained in paragraph 5 of the following doc:
http://www.casa.gov.au/wcmswr/_asset...worth/35_7.pdf
Note: that only STC's form an approved country count although this does cover FAA and EASA.
CASA have actually expanded this in 2010 as prior to that only STC's from the type certificate holders country were automatically accepted. Who says the department only takes away! (Just mostly)
For those who need to argue this this regulation works alongside the CAR30 reg which says "modifications must be approved by CASA" by stating "a modification is taken to be approved by CASA if:"
I do not blame most LAME's for not knowing this, CAAP 35-7 is an obscure doc that mostly applies to design organizations (The people who do EO's!). Unfortunately due to the complexity of the regs LAME's simply do not have time to troll through them all (took me 20mins and I knew where to find it!) in the hope they will save a few dollars.
Owners are always grateful when $$$ are saved but are rarely willing to pay for research time that does not pay off so LAME's are left making judgement calls of when to do more research.
This is when having a good knowledgeable LAME is worth paying extra for. BIG $$$$$$$ can be saved by knowing what mods are out there. Especially as some STC's are cheaper than the genuine parts they replace.