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UPDATE 1-Nominee to head U.S. export controls bureau gives up acting duties -Commerce Department

-Commerce Department@ (Adds details on nominee from sources, paragraphs 9-11)

WASHINGTON, Aug 29 (Reuters) - President Donald Trump's nominee to oversee the U.S. Commerce Department's bureau that controls exports of technology to foreign firms, such as China's Huawei Technologies Co Ltd, said on Thursday she is renouncing her acting duties but has not withdrawn from the confirmation process.

Neither the official, Nazak Nikakhtar, nor the Commerce Department offered a reason for her decision. Nikakhtar was nominated to head the Bureau of Industry and Security (BIS) by Trump in April and has been awaiting confirmation.

Nikakhtar has decided to return to her role as Assistant Secretary of Commerce for Industry and Analysis "where she will continue to advance the Administration's trade and national security policy priorities," a spokesman said. Nikakhtar was confirmed by the Senate for that position in March last year.

Reached by Reuters, Nikakhtar said she was "really proud to have served," and committed to serving Commerce Secretary Wilbur Ross any way possible. "I am going to speak with leadership about how I can best serve the country," she added.

The BIS is at the forefront of Trump's trade war with China, which the United States started last year in part over allegations Chinese companies steal American intellectual property.

After the U.S. government accused Huawei, the world's top telecoms equipment maker, of stealing U.S. technology and violating U.S. sanctions on Iran, BIS put Huawei on a so-called entity list, effectively banning firms from selling U.S. goods to the Chinese company without special licenses.

Since then, companies have submitted over 130 applications for licenses to sell U.S. goods to Huawei, but have received no responses, even though Trump promised to allow some sales to the firm at a meeting with Chinese President Xi Jinping in June.

BIS was also leading the process of setting rules to make it harder to export certain critical technologies deemed essential to national security to countries such as China. Many companies are waiting impatiently for rule proposals to find out what technologies will be affected by the regulations.

A person familiar with the matter said internal divisions at the bureau may have hamstrung Nikakhtar, known as a China hawk, as she sought to define policies.

Nikakhtar is seen as aggressively prioritizing national security concerns, which often put her at odds with industry, according to a person familiar with the matter. However, another person credited her with being very open to accepting meetings with the private sector.

Her nomination faced headwinds early on. At a U.S. Senate banking committee hearing in June, two senators said they could not advance her confirmation until seeing a report she contributed to that said auto imports threatened U.S. national security. (Reporting by Karen Freifeld and Alexandra Alper; Editing by Dan Grebler and Grant McCool)