2898470 - Adding subaccount to SAP Cloud Connector fails - SCC handshake failed: 407 — Proxy Authentication Required

While trying to add subaccount to SAP Cloud Connector (SCC) and it fails with the error displayed in the User Interface (UI):

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500 Failed to sign the Cloud Connector certificate for subaccount <subaccount name>@hana.ondemand.com.
Verify configuration and proxy settings - see "Log and Trace Files" for details.
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In SCC's ljs_trace/scc_core.trc the following can be seen:

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#ERROR#com.sap.scc.ui#http-bio-8443-exec-6#          #SCC handshake failed: 407 — Proxy Authentication Required
com.sap.scc.servlets.SccHandshakeException: SCC handshake failed: 407 — Proxy Authentication Required
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• SAP Business Tecnology Platform(BTP);
• SAP Cloud Connector(SCC).

Returned HttpResponse with code 407, Cloud Connector, SCC, Proxy Authentication, SAP Cloud Connector, Network, configuration, subaccount, 407 - Proxy Authentication Required, adding subaccount, subaccount, sub-account, sub account, hana.ondemand.com, certificate, PKIX, cert , KBA , BC-MID-SCC , SAP Cloud Connector On-Demand/On-Premise Connectivity , Problem