I think Rav Frank tz”l was saying (I never really looked into it, so correct me if I am wrong) that since there is no gezeirah on powdered milk, you don’t need a Jew to watch it. But you still need to make sure it is kosher, so government regulations (or maybe even in a country where there are basically no non-kosher animals) we can assume it is from a cow. Rav Moshe tz”l held that government regulation in America is strong enough to actually make it like a Jew watched it. (Anan Sahadi) So it seems that Rav Tzvi Pesach Frank tz”l argued on Rav Moshe’s blanket heter since he only allows one to rely on regulation when one can reasonably assume it is kosher and does not need Chazal’s takannha ie. the gezeirah is not in affect.
So, yes, it seems that in a country where one cannot even assume it is from a cow, it is assur.