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Yes. You can use special statements called ignoring or considering statements.
You can ignore the following attributes: case, diacriticals, expansion, hyphens, punctuation and white space.
By default, AppleScript ignores only the case of strings. Example usage:
ignoring case and diacriticals
"castle" = "Cåstle" --> true
To take into consideration some attributes, simple replace "ignoring" with "considering".