EFS Encrypted Files over home workgroup network via WebDAV avoiding Active Directory fixing Access Denied errors

Question

This is for information to help others
KEYWORDS:
  - Sharing EFS encrypted files over a personal lan wlan wifi ap network
  - Access denied on create new file / new fold on encrypted EFS network file share remote mapped folder
  - transfer encryption keys / certificates
  - set trusted delegation for user + computer for EFS encrypted files via
Kerberos
  - Windows Active Directory vs network file share
  - Setting up WinDAV server on Windows 7 Pro / Ultimate
It has been a long painful road to discover this information.
I hope sharing it helps you.
Using EFS on Windows 7 pro / ultimate is easy and works great. See
here and
here
So too is opening + editing encrypted files over a peer-to-peer Windows 7 network.
HOWEVER, creating a new file / new folder over a peer-to-peer Windows 7 network
won't work (unless you follow below steps).
Typically, it is only discovered as an issue when a home user wants to use synchronisation software between their home computers which happens to have a few folders encrypted using windows EFS. I had this issue trying to use GoodSync.
Typically an "Access Denied" error messages is thrown when a \\clientpc tries to create new folder / new file in an encrypted folder on a remote file share \\fileserver.
Why such a EFS drama when a network is involved?
Assume a home peer-to-peer network with 2pc:  \\fileserver  and  \\clientpc
When a \\clientpc tries to create a new file or new folder on a \\fileserver (remote computer) it fails. In a terribly simplified explanation it is because the process on \\fileserver that is answering the network requests is a process working for a user on
another machine (\\clientpc) and that \\fileserver process doesn't have access to an encryption certificate (as it isn't a user). Active Directory gets around this by using kerberos so the process can impersonate a \\fileserver user and then use their certificate
(on behalf of the clienpc's data request).
This behaviour is confusing, as a \\clientpc can open or edit an existing efs encrypted file or folder, just can't create a new file or folder. The reason editing + opening an encrypted file over a network file share is possible is because the encrypted
file / folder already has an encryption certificate, so it is clear which certificate is required to open/edit the file. Creating a new file/folder requires a certificate to be assigned and a process doesn't have a profile or certificates assigned.
Solutions
There are two main approaches to solve this:
     1) SOLVE by setting up an Active Directory (efs files accessed through file shares)
          EFS operations occur on the computer storing the files.
          EFS files are decrypted then transmitted in plaintext to the client's computer
          This makes use of kerberos to impersonate a local user (and use their certificate for encrypt + decrypt)
     2) SOLVE by setting up WebDAV (efs files accessed through web folders)
           EFS operations occur on the client's local computer
           EFS files remain encrypted during transmission to the client's local computer where it is decrypted
           This avoids active directory domains, roaming or remote user profiles and having to be trusted for delegation.
           BUT it is a pain to set up, and most online WebDAV server setup sources are not for home peer-to-peer networks or contain details on how to setup WebDAV for EFS file provision
         READ BELOW as this does
Create new encrypted file / folder on a network file share - via Active Directory
It is easily possible to sort this out on a domain based (corporate) active directory network. It is well documented. See
here. However, the problem is on a normal Windows 7 install (ie home peer-to-peer) to set up the server as part of an active directory domain is complicated, it is time consuming it is bulky, adds burden to operation of \\fileserver computer
and adds network complexity, and is generally a pain for a home user. Don't. Use a WebDAV.
Although this info is NOT for setting up EFS on an active directory domain [server],
for those interested here is the gist:
Use the Active Directory Users and Computers snap-in to configure delegation options for both users and computers. To trust a computer for delegation, open the computer’s Properties sheet and select Trusted for delegation. To allow a user
account to be delegated, open the user’s Properties sheet. On the Account tab, under Account Options, clear the The account is sensitive and cannot be delegated check box. Do not select The account is trusted for delegation. This property is not used with
EFS.
NB: decrypted data is transmitted over the network in plaintext so reduce risk by enabling IP Security to use Encapsulating Security Payload (ESP)—which will encrypt transmitted data,
Create new encrypted file / folder on a network file share - via WebDAV
For home users it is possible to make it all work.
Even better, the functionality is built into windows (pro + ultimate) so you don't need any external software and it doesn't cost anything. However, there are a few hotfixes you have to apply to make it work (see below).
Setting up a wifi AP (for those less technical):
   a) START ... CMD
   b) type (no quotes): "netsh  wlan set hostednetwork mode=allow ssid=MyPersonalWifi key=12345 keyUsage=persistent"
   c) type (no quotes): "netsh  wlan start hostednetwork"
Set up a WebDAV server on Windows 7 Pro / Ultimate
-----ON THE FILESERVER------
   1  click START and type "Turn Windows Features On or Off" and open the link
       a) scroll down to "Internet Information Services" and expand it.
       b) put a tick in: "Web Management Tools" \ "IIS Management Console"
       c) put a tick in: "World Wide Web Services" \ "Common HTTP Features" \ "WebDAV Publishing"
       d) put a tick in: "World Wide Web Services" \ "Security" \ "Basic Authentication"
       e) put a tick in: "World Wide Web Services" \ "Security" \ "Windows Authentication"
       f) click ok
       g) run HOTFIX - ONLY if NOT running Windows 7 / windows 8
KB892211 here ONLY for XP + Server 2003 (made in 2005)
KB907306 here ONLY for Vista, XP, Server 2008, Server 2003 (made in 2007)
  2 Click START and type "Internet Information Services (IIS) Manager"
  3 in IIS, on the left under "connections" click your computer, then click "WebDAV Authoring Rules", then click "Open Feature"
       a) on the right side, under Actions, click "Enable WebDAV"
  4 in IIS, on the left under "connections" click your computer, then click "Authentication", then click "Open Feature"
       a) on the "Anonymous Authentication" and click "Disable"
       b) on the "Windows Authentication" and click "Enable"
      NB: Some Win 7 will not connect to a webDAV user using Basic Authentication.
        It can be by changing registry key:
           [HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\WebClient\Parameters]
           BasicAuthLevel=2
       c) on the "Windows Authentication" click "Advanced Settings"
           set Extended Protection to "Required"
       NB: Extended protection enhances the windows authentication with 2 security mechanisms to reduce "man in the middle" attacks
  5 in IIS, on the left under "connections" click your computer, then click "Authorization Rules", then click "Open Feature"
       a) on the right side, under Actions, click "Add Allow Rule"
       b) set this to "all users". This will control who can view the "Default Site" through a web browser
       NB: It is possible to specify a group (eg Administrators is popular) or a user account. However, if not set to "all users" this will require the specified group/user account to be used for logged in with on the
clientpc.
       NB: Any user account specified here has to exist on the server. It has a bug in that it usernames specified here are not validated on input.
  6 in IIS, on the left under "connections" click your computer, then click "Directory Browsing", then click "Open Feature"
       a) on the right side, under Actions, click "Enable"
HOTFIX - double escaping
  7 in IIS, on the left under "connections" click your computer, then click "Request Filtering", then click "Open Feature"
       a) on the right side, under Actions, click "Edit Feature Settings"
       b) tick the box "Allow double escaping"
     *THIS IS VERY IMPORTANT* if your filenames or foldernames contain characters like "+" or "&"
     These folders will appears blank with no subdirectories, or these files will not be readable unless this is ticked
     This is safe btw. Unchecked (default) it filters out requests that might possibly be misinterpreted by buggy code (eg double decode or build url's via string-concat without proper encoding). But any bug would need to be in IIS basic
file serving and this has been rigorously tested by microsoft, so very unlikely. Its safe to "Allow double escaping".
  8 in IIS, on the left under "connections" right click "Default Web Site", then click "Add Virtual Directory"
       a) set the Alias to something sensible eg "D_Drive", set the physical path
       b) it is essential you click "connect as" and set
this to a local user (on fileserver),
       if left as "pass through authentication" a client won't be able to create a new file or folder in an encrypted efs folder (on fileserver)
             NB: the user account selected here must have the required EFS certificates installed.
                        See
here and
here
        NB: Sharing the root of a drive as an active directory (eg D:\ as "D_Drive") often can't be opened on clientpcs.
      This is due to windows setting all drive roots as hidden "administrative shares". Grrr.
       The work around is on the \\fileserver create an NTFS symbollic link
          e.g. to share the entire contents of "D:\",
                on fileserver browse to site path (iis default this to c:\inetpub\wwwroot)
                in cmd in this folder create an NTFS symbolic link to "D:\"
                so in cmd type "cd c:\inetpub\wwwroot"
                then in cmd type "mklink /D D_Drive D:\"
        NB: WebDAV will open this using a \\fileserver local user account, so double check local NTFS permissions for the local account (clients will login using)
         NB: If clientpc can see files but gets error on opening them, on clientpc click START, type "Manage Network Passwords", delete any "windows credentials" for the fileserver being used, restart
clientpc
  9 in IIS, on the left under "connections" click on "WebDAV Authoring Rules", then click "Open Feature"
       a) click "Add authoring rules". Control access to this folder by selecting "all users" or "specified groups" or "specified users", then control whether they can read/write/source
       b) if some exist review existing allow or deny.
           Take care to not only review the "allow access to" settings
           but also review "permissions" (read/write/source)
       NB: this can be set here for all added virtual directories, or can be set under each virtual directory
  10 Open your firewall software and/or your router. Make an exception for port 80 and 443
       a) In Windows Firewall with Advanced Security click Inbound Rules, click New Rule
             choose Port, enter "80, 443" (no speech marks), follow through to completion. Repeat for outbound.
          NB: take care over your choice to untick "Public", this can cause issues if no gateway is specified on the network (ie computer-to-computer with no router). See "Other problems+fixes"
below, specifically "Cant find server due to network location"
       b) Repeat firewall exceptions on each client computer you expect to access the webDAV web folders on
HOTFIX - MAJOR ISSUE - fix KB959439
  11 To fully understand this read "WebDAV HOTFIX: RAW DATA TRANSFERS" below
      a) On Windows 7 you need only change one tiny registry value:
           - click START, type "regedit", open link
           -browse to [HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\MRxDAV\Parameters]
           -on the EDIT menu click NEW, then click DWORD Value
           -Type "DisableEFSOnWebDav" to name it (no speech marks)
           -on the EDIT menu, click MODIFY, type 1, then click OK 
           -You MUST now restart this computer for the registry change to take effect.
      b) On Windows Server 2008 / Vista / XP you'll FIRST need to
download Windows6.0-KB959439 here. Then do the above step.
         NB microsoft will ask for your email. They don't care about licence key legality, it is more to keep you updated if they modify that hotfix
  12 To test on local machine (eg \\fileserver) and deliberately bypass the firewall.
        a) make sure WebClient Service is running
            (click START, type "services" and open, scroll down to WebClient and check its status)
        b) Open your internet software. Go to address "http://localhost:80" or "http://localhost:80"
            It should show the default "IIS7" image.
            If not, as firewall and port blocking are bypassed (using localhost) it must be a webDAV server setting. Check "Authorization Rules" are set to "Allow All Users"           
        c) for one of the "virtual directories" you added (8), add its "alias" onto "http://localhost/"
                e.g. http://localhost/D_drive
            If nothing is listed, check "Directory Browsing" is enabled
  13 To test on local machine or a networked client and deliberately try and access through the firewall or port opening of your router.
        a) make sure WebClient Service is running
            (click START, type "services" and open, scroll down to WebClient and check its status)
        b) open your internet software. Go to address "http://<computer>:80" or "http://<computer>:80".
              eg if your server's computer name is "fileserver" go to "http://fileserver:80"
              It should show the default "IIS7" image. If not, check firewall and port blocking. 
              Any issue ie if (12) works but (13) doesn't,  will indicate a possible firewall issue or router port blocking issue.
       c) for one of the "virtual directories" you added (8), add its "alias" onto "http://<computername>:80/"
               eg if alias is "C_driver" and your server's computer name is "fileserver" go to "http://fileserver:80/C_drive"
               A directory listing of files should appear.
--- ON EACH CLIENT ----
HOTFIX - improve upload + download speeds
  14 Click START and type "Internet Options" and open the link
        a) click the "Connections" tab at the top
        b) click the "LAN Settings" button at the bottom right
        c) untick "Automatically detect settings"
HOTFIX - remove 50mb file limit
  15 On Windows 7 you need only change one tiny registry value:
      a) click START, type "regedit", open link
      b) browse to [HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\WebClient\Parameters]
       c) click on "FileSizeLimitInBytes"
       d) on the EDIT menu, click MODIFY, type "ffffffff", then click OK (no quotes)
HOTFIX - remove prompt for user+pass on opening an office or pdf document via WebDAV
 16 On each clientpc click START, type "Internet Options" and open it
         a) click on "Security" (top) and then "Custom level" (bottom)
         b) scroll right to the bottom and under "User Authentication" select "Automatic logon with current username and password"
         SUCH an easy fix. SUCH an annoying problem on a clientpc
   NB: this is only an issue if the file is opened through windows explorer. If opened through the "open" dialogue of the software itself, it doesn't happen. This is as a WebDAV mapped drive is consdered a "web folder" by windows
explorer.
TEST SETUP
  17 On the client use the normal "map network drive"
            e.g. server= "http://fileserver:80/C_drive", tick reconnect at logon
            e.g. CMD: net use * "http://fileserver:80/C_drive"
         If it doens't work check "WebDAV Authoring Rules" and check NTFS permissions for these folders. Check that on the filserver the elected impersonation user that the client is logging in with (clientpc
"manage network passwords") has NTFS permissions.
  18 Test that EFS is now working over the network
       a) On a clientpc, map network drive to http://fileserver/
       b) navigate to a folder you know on the \\flieserver is encrypted with EFS
       c) create a new folder, create a new file.
           IF it throws an error, check carefully you mapped to the WebDAV and not file share
              i.e. mapped to "http://fileserver" not "\\fileserver"
           Check that on clientpc the required efs certificate is installed. Then check carefully on clientpc what user account you specified during the map drive process. Then check on the \\fileserver this
account exists and has the required EFS certificate installed for use. If necessary, on clientpc click START, type "Manage Network Passwords" and delete the windows credentials currently in the vault.
       d) on clientpc (through a webDAV mapped folder) open an encrypted file, edit it, save it, close it. On the \\fileserver now check that file is readable and not gobble-de-goup
       e) on clientpc copy an encrypted efs file into a folder (a webDAV mapped folder) you know is not encrypted on \\fileserver. Now check on the \\fileserver computer that the file is readable and not gobble-de-goup (ie the
clientpc decrypted it then copied it).
        If this fails, it is likely one in IIS setting on fileserver one of the shared virtual directories is set to: "pass through authentication" when it should be set to "connect as"
        If this is not readable check step (11) and that you restarted the \\fileserver computer.
  19 Test that clients don't get the VERY annoying prompt when opening an Office or PDF doc
      a) on clientpc in windows explorer browse to a mapped folder you know is encrypted and open an office file and then PDF.
            If a prompt for user+pass then check hotfix (16)
  20 Consider setting up a recycling bin for this mapped drive, so files are sent to recycling bin not permanently deleted
      a) see the last comment at the very bottom of
this page: 
Points to consider:
   - NB: WebDAV runs on \\fileserver under a local user account, so double check local NTFS permissions for that local account and adjust file permissions accordingly. If the local account doesn't have permission, the webDAV / web folder share won't
either.
  - CONSIDER: IP Security (IPSec) or Secure Sockets Layer (SSL) to protect files during transport.
MORE INFO: HOTFIX: RAW DATA TRANSFERS
More info on step (11) above.
Because files remain encrypted during the file transfer and are decrypted by EFS locally, both uploads to and downloads from Web folders are raw data transfers. This is an advantage as if data is intercepted it is useless. This is a massive disadvantage as
it can cause unexpected results. IT MUST BE FIXED or you could be in deep deep water!
Consider using \\clientpc to access a webfolder on \\fileserver and copying an encrypted EFS file (over the network) to a web folder on \\fileserver that is not encrypted.
Doing this locally would automatically decrypt the file first then copy the decrypted file to the non-encrypted folder.
Doing this over the network to a web folder will copy the raw data, ie skip the decryption stage and result in the encrypted EFS file being raw copied to the non-encrypted folder. When viewed locally this file will not be recognised as encrypted (no encryption
file flag, not green in windows explorer) but it will be un-readable as its contents are still encrypted. It is now not possible to locally read this file. It can only be viewed on the \\clientpc
There is a fix:
      It is implimented above, see (11) above
      Microsoft's support page on this is excellent and short. Read "problem description" of "this microsoft webpage"
Other problems + fixes
  PROBLEM: Can't find server due to network location.
     This one took me a long time to track down to "network location".
     Win 7 uses network locations "Home" / "Work" / "Public".
     If no gateway is specified in the IP address, the network is set to '"unidentified" and so receives "Public" settings.
     This is a disaster for remote file share access as typically "network discovery" and "file sharing" are disabled under "Public"
     FIX = either set IP address manually and specify a gateway
     FIX = or  force "unidentified" network locations to assume "home" or "work" settings -
read here or
here
     FIX = or  change the "Public" "advanced network settings" to turn on "network discovery" and "file sharing" and "Password Protected Sharing". This is safe as it will require a windows
login to gain file access.
  PROBLEM: Deleting files on network drive permanently deletes them, there is no recycling bin
       By changing the location of "My Contacts" or similar to the root directory of your mapped drive, it will be added to recycling bin locations
      Read
here (i've posted a batch script to automatically make the required reg files)
I really hope this helps people. I hope the keywords + long title give it the best chance of being picked up in web searches.

Answer 1

What probably happens is that processes are using those mounts. And that those processes are not killed before the mounts are unmounted. Is there anything that uses those mounts?