Let's hope one of the encryption wallahs answers the encryption question. I'll answer the legal question with some practical advice.
You say you're legally required to have the file encrypted at all times. This sort of a requirement is a legal fiction crafted by technically fuzzy lawyers, not by programmers.
You're describing, I think, uploading a cleartext file using SSL, and then encrypting it as it hits the server?
Since you are moving at the speed of electrons and as fast as practically possible, I would not be fastidiously precise in discussing the process with lawyers or executives.
Use words like 'instantly' and 'moment'...imprecise maybe, but highly suggestive of the practical case. "The file is instantly encrypted the moment it hits the server.' That there are nanoseconds when the file sits in plain text is a matter where discretion and circumspection will have a better result than precise and confusing explanations.
Trust me on this.