Sync WinXP encrypted files

Trying to sync files from my harddrive to my USB-drive I get an error!
The file on the U-drive is encrypted by WinXP.
If I just copy the file using Windows XP I get a message box telling me that it will be decrypted after which it is successfully copied.

Here is the error message from Toucan:

Starting...
11:35:40: Error: Failed to copy the file 'U:\temp\test\synctest encrypted by winXP.txt' to 'E:\Documents\synctest encrypted by winXP.txt' (error 6000: the specified file could not be encrypted.)
Copied \synctest encrypted by winXP.txt
11:35:40: Error: Failed to open 'E:\Documents\synctest encrypted by winXP.txt' for writing (error 2: the system cannot find the file specified.)
11:35:40: Error: Failed to modify file times for 'E:\Documents\synctest encrypted by winXP.txt' (error 0: the operation completed successfully.)
Finished...

Is this a bug in Toucan?