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For smartcard authentication to work over terminal services, the user certificate must be present in the certificate store, and it must match the selected certificate on the smartcard. This is unlike local logon where the certificate only needs to be present on the smartcard. If the Certificate Propagation service (certpropsvc) is not running on the client machine, the certificate is not propagated to the user store. This leads to the error condition. This is usually seen when a new certificate is issued that is not propagated to the user store because the Certificate Propagation service was stopped.
The smartcard reader is responsible for starting the Certificate Propagation service as a part of the INF installer. Make sure all reader drivers have the following section in their INF:
If the Certificate Propagation service does not occur, contact the reader vendors and have them update their drivers.
As a workaround, start the service manually. Normally, set the Certificate Propagation service to start automatically in the ‘service.msc’ snap-in.
The ‘sc queryex certpropsvc’ command or the ‘services.msc’ snap-in may be used to determine whether the service is running.
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