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SmartFTP does not support PGP out of the box. However there are is a free tool available which integrates nicely into SmartFTP.
The GNU Privacy Guard (GnuPG or GPG) is a free software replacement for the PGP suite. While it doesn't offer all the features (e.g. PGP Disk) of commercial products it does file encryption with ease. For example the GPGee shell extension which is included in the GnuPG for Windows package can be used in the SmartFTP's Local Browser to encrypt a file on the local computer.