Despite intelligence reports that Iraq still sponsored groups on the State Department's (SD) terrorist list, and 'apparently without consulting Congress', the Reagan administration removed Iraq from the state terrorism sponsorship list in 1982.
Source: New York Times, 28 February 1982.

The removal made Iraq eligible for US dual-use and military technology.
Source: Mark Phythian, Arming Iraq (Northeastern University Press), p34.

Iraq reportedly began using chemical weapons (CW) against Iranian troops in 1982, and significantly increased CW use in 1983. Reagan's secretary of state, George Shultz, said that reports of Iraq using CWs on Iranian military personnel 'drifted in' at the year's end.
Source: Leonard A Cole, The Eleventh Plague (New York), p87.

A CIA report noted Iraq's use of mustard gas in August 1983, giving further credence to the suggestion that the SD and/or National Security Council (NSC) were well aware of Iraq's use of CW at this time.
Source: 'CW Use in Iran-Iraq War', declassified on 2 July 1996 and placed on the website of the Federation of American Scientists.

According to the Washington Post, the CIA began in 1984 secretly to give Iraq intelligence which Iraq used to 'calibrate' its mustard gas attacks on Iranian troops. In August, the CIA established a direct Washington-Baghdad intelligence link, and for 18 months, starting in early 1985, the CIA provided Iraq with 'data from sensitive US satellite reconnaissance photography...to assist Iraqi bombing raids.'
Source: Washington Post, 15 December 1986

The United States re-established full diplomatic ties with Iraq on 26 November.
Source: New York Times, 27 November 1984.

In 1985 the US House of Representatives passed a bill to put Iraq back on the state terrorism sponsorship list.

After the bill's passage, Shultz wrote to the bill's sponsor, Rep Howard Berman, and cited the US 'diplomatic dialogue on this and other sensitive issues'. He claimed that 'Iraq has effectively distanced itself from international terrorism', and stated that if the US found that Iraq supported groups practising terrorism 'we would promptly return Iraq to the list'.

Rep Berman dropped the bill and explicitly cited Shultz's assurances.
Source: BW Jentleson, With Friends Like These (WW Norton), p54.

The Department of Defence (DOD) under-secretary for trade security policy, Stephen Bryen, informed the Commerce Department's (CD) Assistant Secretary for Trade Administration in November that intelligence linked the Saad 16 research in Iraq centre with ballistic missile development.

Between 1985 and 1990, CD approved numerous computer sales to Iraq that went directly to Saad 16. The CD approved over $1 million of computer equipment for sale to Saad 16 after the department received the above-mentioned November letter from DOD.
Source: Committee on Government Operations, US House of Representatives, 2 July 1991.

US intelligence reported in 1991 that the US helicopters sold to Iraq in 1983 were used in 1988 to spray Kurds with chemicals.
Source: Los Angeles Times, 13 February 1991.

Reagan administration records show that between September and December 1988, 65 licences were granted for dual-use technology exports. This averages out as an annual rate of 260 licences.
Source: Jentleson, op cit, p88.

Although the CIA and the Bush administration knew that Iraq's Ministry of Industry and Military Industrialisation (MIMI) 'controlled entities were involved in Iraq's clandestine nuclear, chemical, and biological weapons programmes and missile programmes...the Bush administration [approved] dozens of export licences that [allowed] United States and foreign firms to ship sophisticated US dual-use equipment to MIMI-controlled weapons factories'.
Source: Statement by Rep. Henry Gonzalez, 'Details on Iraq's procurement network', 102nd US Congress, 10 August 1992.

From 18 July to 1 August (Iraq invaded Kuwait on 2 August) the Bush administration approved $4.8 million in advanced technology product sales to Iraq. End-buyers included MIMI and Saad 16. MIMI was identified in 1988 as a facility for chemical, biological, and nuclear weapons programmes. In 1989 Saad was linked to CW and nuclear weapons development.
Source: Committee on Government Operations, US House of Representatives, 'Strengthening the export licensing system', 2 July 1991.

The Bush administration approved $695,000 of data transmission devices the day before Iraq invaded Kuwait.
Source: Washington Post, 11 March 1991.