Starting with Windows NT 5.0, AKA Windows 2000, the NTFS file system allowed you to encrypt files and folders.
To prevent encryption from being used on a computer:
1. Copy / Paste the following to a DisableEFs.reg file:
2. Merge the DisableEFs.reg file with the computer's registry.
3. Shutdown and restart Windows.
When anyone attempts to encrypt a file system object, the will receive an error message.