Synchronize issue with ClearQuest Connector

Hi all,
I've 2 servers
- one with RTC 2.0.0.2
- one with CC & CQ 7.1.1 + CQ connector installed

I've completed setup of ClearQuest Connector according the documentation
deployed automatic sync rules
The CQ Gateway is running fine

Issue: when I submit a defect in CQ it doesn't seem to get synced to RTC
the error is
"java.lang.IllegalArgumentException: Work item type Defect does not exist."

I checked in RTC and there is a type Defect of work item.

Kind regards
Joel